United States

IFRS Newsletter: Insurance - Moving Towards International Insurance Accounting

Jun 02, 2014
From the Financial Reporting View and the IFRS Institute

The May 2014, Issue 40 of KPMG ISG's IFRS Newsletter: Insurance - Moving Towards International Insurance Accounting discusses the IASB's redeliberations about:

Recognizing the Contractual Service Margin in Profit or Loss. The Board confirmed that it still supports the provisions of its 2013 Exposure Draft, Insurance Contracts, related to recognizing the contractual service margin in profit or loss. However, the Board clarified that, for non-participating contracts, the service represented by the contractual service margin would be insurance coverage that (1) is provided based on the passage of time and (2) reflects the expected number of contracts in force.

Fixed-Fee Service Contracts. The Board tentatively decided that entities would be permitted to apply the revenue recognition standard to fixed-fee service contracts that meet the criteria in the insurance contracts Exposure Draft.

Significant Insurance Risk. The final standard will modify wording in the Exposure Draft to clarify that significant insurance risk occurs only when there is a possibility that an issuer will incur a loss on a present-value basis.

Portfolio Transfers and Business Combinations. The final standard will modify wording in the Exposure Draft to clarify that contracts acquired through a portfolio transfer or a business combination would be accounted for as if they were issued by the entity at the date of the portfolio transfer or business combination.

Read KPMG ISG's IFRS Newsletter: Insurance - Moving Towards International Insurance Accounting