EFRAG submits its Final Endorsement Advice on IFRS 17 Insurance Contracts to European Commission

EFRAG has submitted its Final Endorsement Advice on IFRS 17 Insurance Contracts including the June 2020 amendment to the European Commission.

In its final assessment, the EFRAG Board concluded on a consensus basis that apart from the requirement to apply annual cohorts to intergenerationally-mutualised and cash-flow matched contracts, all the other requirements of IFRS 17, on balance (i) meet the qualitative characteristics of relevance, reliability, comparability and understandability required to support economic decisions and the assessment of stewardship, raise no issues regarding prudent accounting, and that they are not contrary to the true and fair view principle; and (ii) are conducive to the European public good. With respect to the requirement​ to apply annual cohorts to intergenerationally-mutualised and cash-flow matched contracts, EFRAG Board members did not reach a consensus.

IFRS 17 will be applicable for annual reporting periods on or after 1 January 2023. If an entity applies IFRS 17 earlier, it shall disclose that fact. Early application is permitted for entities that apply IFRS 9 Financial Instruments on or before the date of initial application of IFRS 17.

EFRAG’s press release relating to the Final Endorsement Advice and documents included in the final endorsement advice package may be accessed here.