The November 2015, Issue 50 of KPMG ISG’s IFRS Newsletter: Insurance highlights the November IASB meeting, at which the Board’s discussions focused on:
Measurement Model Comparisons. After analyzing the similarities and differences between the measurement model and the variable fee approach, the Board decided that it was not necessary to minimize the differences between the models and, therefore, neither model will be amended.
Discretionary Cash Flows. The IASB considered treatment of changes in expectations about discretionary cash flows to policyholders because participating contracts under the general measurement model include those types of cash flows. The Board directed the staff to conduct additional research.
Issues Arising from the Variable Fee Approach. The IASB decided to extend to underlying assets related to direct participating contracts an existing exception that permits an entity to measure some underlying assets related to unit-linked contracts at fair value through profit or loss. The Board also reached decisions about applying the variable fee approach on transition in the forthcoming standard about insurance contracts.
Status of the Project. The IASB has completed most of the redeliberations in the insurance project. At a future meeting, the Board will discuss the treatment of discretion in participating contracts under the general measurement model, additional steps in due process, and the effective date.