The May 2015, Issue 45 of KPMG ISG’s IFRS Newsletter: Insurance – Moving Towards International Insurance Accounting discusses the IASB’s education session about:
Application of the Variable Fee Approach. The Board discussed (1) when and how to consider the effect of mutualization in the measurement of insurance contracts and (2) modifications to the transition requirements for entities that apply the simplified retrospective approach.
Subsequent Measurement of the Contractual Service Margin (CSM). The Board discussed whether a current rate should be used to measure the CSM subsequent to the initial recognition for all insurance contracts.
Indirect Participating Contracts. The IASB staff recommended that interest expense in profit or loss be determined by applying the level yield method of the effective yield approach.
Presentation of Interest Expense for Participating Contracts. The Board discussed whether to provide an accounting policy choice to issuers of participating contracts.
The Board did not reach decisions at this education session. It will continue to discuss how the general insurance model may need to be modified for participating contracts.