The retrospective calculation of a CSM under IFRS 17 requires data that companies have often not needed to retain in the past – such as initial premiums on single premium products, acquisition cash flows, and historic assumption sets – and some companies are finding this data now does not exist. Note that this effect can be reflected in the CSM (if the variable fee approach applies), in the OCI or in the statement of profit and loss.Ĭompleteness of data is a major issue. Required presentation on the transition date balance sheet following the full retrospective approachīest estimate of expected cash flows (BE)Įxpected present value using the discount curve and BE assumptions as per the transition date.īased on assumptions and entity’s view as per the transition date.īased on the calculations of the BE and RA at the initial recognition date and consideration of account developments to the transition date.ĭifference in expected present value of the insurance portfolio using the yield curve and BE assumptions at the transition date minus the expected present value using the curve on the initial recognition date and the BE assumptions as per the transition date. Step 3 – Recognise any resulting net difference in equity.Step 2 – Derecognise any existing balances, which would not exist had the Standard always applied (eg deferred acquisition costs (DAC) or acquired value of in-force business (AVIF) intangibles), and IFRS 17 Full retrospective approach.Step 1 – Recognise and measure each group of insurance contracts as if the Standard has always applied,.To apply the Standard retrospectively, at the beginning of the period immediately preceding the date of initial application an entity should follow the steps outlined below: Something else - Insurance contract liabilities In such cases, entities should only apply prospectively the option not to adjust the contractual service margin for the changes in the entity’s share of the underlying items caused by financial risk or for changes in fulfilment cash flows attributable to guarantees.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |