Wiley Interpretation and Application of IFRS Standards

33Accounting for Insurance Contracts

1. Introduction
2. Definitions of Terms
3. Insurance Contracts
   1. 1. Insurance Risk
4. Recognition and Measurement Guidance
   1. 1. Adequacy of Insurance Liabilities
      2. Impairment Testing of Reinsurance Assets
      3. Selection of Accounting Principles
      4. Unbundling
      5. Recognition
      6. Discretionary Participation Features in Insurance Contracts
      7. Embedded Derivatives
5. Disclosure
   1. Applying IFRS 9 with IFRS 4
      1. Temporary Exemption from IFRS 9
      2. Disclosures about the temporary exemption from IFRS 9
      3. The Overlay Approach
      4. Disclosures About the Overlay Approach
      5. Interaction with Other Requirements
   2. Transitional Provisions
      1. Temporary Exemption from IFRS 9
      2. The Overlay Approach
6. Future Developments
   1. IFRS 17 Insurance Contracts
7. US GAAP Comparison

Introduction

IFRS 4, Insurance Contracts, mainly addresses the identification of insurance contracts by an entity that issues these contracts—which is not limited to insurance companies—and limited other recognition and measurement issues. It applies to insurance contracts issued, reinsurance contracts held and financial instruments issued with a discretionary participation feature. The matter of the actual accounting for insurance contracts is not addressed in IFRS 4.

IFRS 17, Insurance Contracts, was issued May 2017 to create a comprehensive standard to deal with the identification, recognition, measurement, presentation and disclosure of insurance contracts. IFRS 17 is effective for annual reporting periods beginning on or after 1 January ...