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In July 2021, the International Accounting Standards Board (Board) published the Exposure Draft Initial Application of IFRS 17 and IFRS 9―Comparative Information. The Exposure Draft sets out the Board’s proposals for a narrow-scope amendment to the transition requirements in IFRS 17 Insurance Contracts.

The amendment is an option that is aimed at enabling companies to increase the usefulness of comparative information presented on initial application of IFRS 17 and IFRS 9 Financial Instruments.

The deadline for submitting comments on the Exposure Draft is 27 September 2021. The Board will consider the comments it receives on the Exposure Draft and will decide whether to proceed with the proposed amendment. The Board plans to complete any resulting amendment by the end of 2021.

IASB® Update June 2021

The Board met on 22 June 2021 to discuss a proposed narrow-scope amendment to IFRS 17 Insurance Contracts to address one-time classification differences that may arise in the comparative information that insurance entities present on initial application of IFRS 17 and IFRS 9 Financial Instruments.

The Board tentatively decided to propose a narrow-scope amendment to IFRS 17. The amendment would permit an entity to apply a classification overlay in the comparative periods presented on initial application of IFRS 17 and IFRS 9. The optional classification overlay would: 

  1. apply to financial assets that are related to insurance contract liabilities and to which IFRS 9 has not been applied in the comparative periods;
  2. allow an entity to classify these financial assets in the comparative periods based on a reasonable expectation of how these assets would be classified on initial application of IFRS 9;
  3. apply to comparative periods that have been restated for IFRS 17 (that is, from the transition date to the date of initial application of IFRS 17); and
  4. apply on an instrument-by-instrument basis. 

All 13 Board members agreed with this decision and confirmed they were satisfied the Board has complied with the applicable due process requirements to begin the process of balloting the proposed amendment to IFRS 17.

The Board decided to set a comment period of 60 days for the exposure draft. Twelve of 13 Board members agreed with this decision. (On 16 June 2021 the Due Process Oversight Committee approved a shortened comment period.)  

No Board member indicated an intention to dissent from the proposed amendment to IFRS 17.

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