Mar 31, 2014
From the IFRS Institute
The March 2014, Issue 38 of KPMG ISG's IFRS Newsletter: Insurance - Moving Towards International Insurance Accounting discusses the IASB's redeliberations about two of the five issues targeted for redeliberations:
Unlocking the Contractual Service Margin. The Board decided that changes in the risk adjustment that relate to future coverage and services would adjust the contractual service margin. Favorable changes in estimates that arise after losses were previously recognized in profit or loss would be recognized in profit or loss to the extent that they reverse losses related to coverage and other services in the future. Excess favorable changes in estimates would rebuild the contractual service margin.
Presentation of the Effects of Changes in Discount Rates. The Board decided that an entity may elect to present the effects of changes in discount rates in profit or loss or in other comprehensive income, and would apply that accounting policy election to all contracts within a portfolio, subject to additional forthcoming guidance. An entity also would be required to disclose an analysis of total interest expense.