IFRS 17 introduces the contract boundary concept to identify the cash flows which are relevant to measure the insurance contracts. Contract boundary distinguishes cash flows related to the existing insurance contracts from future contracts. When the insurance company...

IFRS 17 provides guidance on presentation of financial statements, it specifies the line items which require to present in the face of the Financial position (Balance sheet). Insurance companies currently presenting their financial position in a very detailed level...

The insurance companies have to prepare financial statements as per IFRS 17 for the financial years starting on or after 01/01/2023. Measurement of the insurance contracts under IFRS 17 is significantly different from current practice. Complexities may arise with...

New Insurance contracts accounting standard IFRS 17 will be effective from 1st January 2023. This will make a significant change in current accounting practice used by insurance companies. Specially, Key performance indicators (KPIs) used earlier will not be...

Contract boundary is the criteria to identify when the existing contract ends and a new contract begins. Cash flows within the boundary will be taken considered for the measurement as per IFRS 17. If there is no annual renewals, the contract boundary will be same as...

IFRS 15 and other standards are focusing on individual transaction level (individual contracts) to calculate and recognize profit. However, IFRS 17 considers a group of contracts as a base (unit of account) to measure contracts and recognize profit. This is due to the...

A cohort creates a closed group for measuring allocation of Profit (CSM) without losing the trend of profitability over the time. Annual cohorts help to avoid re-averaging profit of a certain group of contracts when continuing with adding new contracts to the same...

Risk adjustment reflects the compensation required to bear uncertainty about the amount and timing of cash flows that rise from non-financial risks. Movement of the risk adjustment during the reporting period, confidence levels and technique used for the calculation...

IFRS 17 is an International Financial Reporting Standard that was issued by the International Accounting Standards Board in May 2017. It will replace IFRS 4 on accounting for insurance contracts and has an effective date of 1 January 2023. IFRS 17 is an International...