The September 2015, Issue 48 of KPMG ISG’s IFRS Newsletter: Insurance – Moving Towards International Insurance Accounting highlights the IASB’s recent discussions about its insurance contracts project:
Addressing the Consequences of Different Effective Dates. The Board continued its discussions about the accounting consequences of different effective dates of IFRS 9, Financial Instruments, and the forthcoming standard about insurance contracts. The Board decided to (1) propose interim amendments to IFRS 4, Insurance Contracts, that would target volatility and (2) permit a deferred effective date for IFRS 9 for certain entities that issue contracts that are in the scope of IFRS 4.
Disaggregating Changes in Market Variables. The Board decided that the effects of changes in market variables would be presented in the statement of comprehensive income, consistent with changes in discount rates. The IASB also considered and reached decisions about the accounting for changes in cash flow amounts, insurance investment expense, and the use of current period book yield approach for contracts with no economic mismatches.
Mitigating Risks Related to Direct Participating Insurance Contracts. The IASB discussed accounting mismatches arising from hedging activities as they relate to direct participating contracts.
FASB and IASB Project Update. The IASB and FASB met in a joint session to update each other about the progress of their respective insurance contracts projects.