IFRS 17 Webcast

A new transition option for IFRS 17 – the classification overlay approach

IFRS 17, Insurance Contracts, introduces significant changes in financial reporting by insurers that report using IFRS. Did you know that when transitioning to IFRS 17 Insurance Contracts and IFRS 9 Financial Instruments, significant accounting mismatches may arise between financial assets and insurance contract liabilities in the comparative information?

The International Accounting Standards Board (the Board) has published an exposure draft (ED) for a narrow-scope amendment to IFRS 17 to help alleviate the potential mismatches. The ED is open for comment until 27 September 2021.

To help insurers accelerate their implementation of IFRS 17, a webcast sharing insights explaining the need for the amendment and how it is proposed to operate is being offered to help your organisation to accelerate their plans for IFRS 17 implementation.

We’ll discuss when and how the proposed approach operates and some potential issues you might like to consider if planning to comment on the proposals. See below for details.

Date: 15 September 2021
Time: 8:00am (EDT)/1:00pm (BST)/2:00pm (CEST)
CPE credits: 1.0

Further detail

The different transition requirements of IFRS 17 and IFRS 9 could result in operational complexities and one-time classification differences in the comparative information presented by some insurers on the initial application of these standards.

To help alleviate these issues, the ED proposes a classification overlay approach to provide insurers with an option to present comparative information about financial assets on a basis that is more consistent with how IFRS 9 will be applied in future reporting periods, without unnecessarily disturbing the implementation processes for both IFRS 17 and IFRS 9.

Following the webcast, participants should be able to explain at a high level:

  • The reasons for the proposed narrow scope amendment to IFRS 17.
  • The proposed optional ‘classification overlay’ approach available to insurers that first apply IFRS 17 and IFRS 9 at the same time.
  • How the proposed amendment applies to both insurers that restate and those that do not restate comparative information for IFRS 9 and some factors to consider in choosing which approach to adopt.
  • Some key areas insurers may wish to consider if proposing to comment on the narrow-scope amendment.

This webcast will last approximately 60 minutes. It will be recorded and a link circulated for those unable to attend.

Presenters:

  • Joachim Kölschbach, Global IFRS Insurance Lead, KPMG International
  • Bob Owel, Director, KPMG International Standards Group
  • Grinni Hsiao, Senior Manager, KPMG International Standards Group

KPMG firms’ approach to implementing IFRS 17 and IFRS 9 recognizes that this is more than just a technical accounting and actuarial issue, providing the opportunity for insurers to streamline processes and provide clear and concise communication of the value they create to shareholders, investors and other key stakeholders.

Audit Committee Guidance on IFRS

Evaluating the auditors' response to risks of material misstatement

As part of their oversight role during the adoption of IFRS 17 Insurance Contracts, insurers' audit committees need to assess and monitor the effectiveness of their external auditors' response to the risks of material misstatements – particularly the auditors' approach to auditing estimates and associated judgements made in the application of the standard.

The Global Public Policy Committee (GPPC), which comprises representatives from the six largest global accounting networks BDO, Deloitte, EY, Grant Thornton, KPMG and PwC, has published guidance to help audit committees evaluate the effectiveness of their auditors' approach.

Find out more in our article Insurers – Further guidance for audit committees on applying IFRS 17

Get in touch

For further information on IFRS 17 implementation, please contact Brian Morrissey or Niall Naughton of our Insurance team. We'd be delighted to hear from you.

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