Phase II of IFRS for insurance contracts – IASB discussion paperIMU special edition |
On 3 May 2007, the International Accounting Standards Board (“the Board”) released for comment a Discussion Paper on accounting for insurance and reinsurance contracts entitled ‘Preliminary Views on Insurance Contracts’ (“the DP”). This is the second phase of the insurance contracts project which in 2005 introduced IFRS 4 – the International Financial Reporting Standard for Insurance Contracts.
This special edition of the Insurance Market Update, prepared by our Insurance Centre of Excellence, summarises and comments on the measurement issues raised in the DP. Subsequent editions will address the other principal topics covered in the DP. We hope you find it useful and informative and would encourage insurers to provide practical observations and comments to the Board by the 16 November 2007. An Exposure Draft (“ED”) is expected to be issued in late 2008 with the final standard on accounting for insurance contracts in place during 2010.
The IASB insurance project aims to establish a common standard for financial reporting of insurance contracts, based on a form of “fair value”. Phase I of the project (IFRS 4) provides a specific definition of an insurance contract, temporary dispensations from certain standards, and guidance on implementing current standards not covered by the dispensations. IFRS 4 was designed to enable insurance companies to report under IFRS by 2005. Phase II of the project is the introduction of a comprehensive IFRS dealing with the recognition and measurement of insurance contracts.
For further information, download our publication Phase II of IFRS for insurance contracts – IASB discussion paper (PDF, 356KB)
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