IFRS

Question 1

describe IFRS

Answer 1

International Financial Reporting Standards (IFRS) is a single set of global financial standards issued by the International Accounting Standards Board (IASB)

Question 2

describe IFRS 4

Answer 2

• intended to provide limited improvements to accounting for insurance contracts until the IASB completed the second, more comprehensive phase of its insurance accounting project
• allowed insurers to use a variety of accounting practices reflecting differences in national accounting requirements

Question 3

describe IFRS 17

Answer 3

• standard to replace IFRS 4, effective 1/1/2023

Question 4

primary objectives of IFRS 17 (2)

Answer 4

• improve comparability between insurers

* improve quality of financial information

Question 5

scope of IFRS 17 (3)

Answer 5

• insurance and reinsurance contracts issued
• reinsurance contracts held
• investment contracts with discretionary participation features

Question 6

IFRS 17 definition of insurance contract

Answer 6

contract under which the insurer accepts significant insurance risk from the policyholder by agreeing to compensate the policyholder if a specified future event
adversely affects the policyholder

Question 7

IFRS 17 model for measuring insurance liabilities

Answer 7

• default model is the General Model, consisting of two items:
  
  • present value of future insurance cash flows with a provision for risk
  • “contractual service margin” offsets the gain and is amortized over the life of the contract

Question 8

two variations of IFRS General Model

Answer 8

• Premium Allocation Approach (PAA)

* Variable Fee Approach (VFA)