EFRAG publishes draft comment letter on IASB’s Exposure Draft Initial Application of IFRS 17 and IFRS 9 - Comparative Information (Proposed amendment to IFRS 17)
13 August 2021
In July 2021, the IASB published Exposure Draft Initial Application of IFRS 17 and IFRS 9 - Comparative Information (Proposed amendment to IFRS 17).
In case of insurers applying IFRS 17 Insurance Contracts and IFRS 9 Financial Instruments for the first time from 2023, the current transition requirements result in certain mismatches when IFRS 9 is not reflected in the accounting for financial assets in the prior periods presented when IFRS 17 and IFRS 9 are first applied. The proposed amendment to IFRS 17 addresses this issue by giving entities an option to present comparative information for certain financial assets in a manner consistent with IFRS 9.
EFRAG has now published its draft comment letter on the Exposure Draft. Overall, EFRAG has agreed with the proposals in the Exposure Draft. EFRAG has recommended the IASB to align the scopes of the classification overlay and the temporary exemption from applying IFRS 9 (which is under IFRS 4 Insurance Contracts) due to inconsistencies in the consolidated financial statements and unnecessary operational complexity.
The draft comment letter may be accessed here. Comments on the draft comment letter are requested by 15 September 2021.