The Basics of IFRS 17 Insurance Contract Accounting

Speaker:  Robert Phelps  |  CPD Hours: 3

Price £345 plus VAT

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OBJECTIVES

Applicable for accounting periods beginning on or after 1st January 2023, IFRS 17 changes fundamentally the way in which insurance contracts are accounted for and reported. After investing 20 or so years of development effort into IFRS 17, the IASB expectation is that it will bring greater transparency about the profitability and financial position resulting from the conduct of insurance contract business.

Preparing for and implementing IFRS 17 is problematic and challenging, requiring considerable effort to gain an initial understanding of the impact on the reported numbers as well as identifying upgrades to processes and systems to ensure they can provide IFRS 17 compliant data.

This series of on-line sessions will focus on a numerical review of the basics of the general accounting model and the premium allocation approach applicable to groups of insurance contracts in a number of practical scenarios. The series will also cover the modified accounting models for reinsurance. Along the way we will point to the main areas of difficulty likely to arise in practice when applying IFRS 17.

The series will also act as a gateway to gaining, through attending further Quorum Training modules, a more detailed knowledge of IFRS 17 and how to apply it in practice.

CONTENT

By the end of the sessions, participants will be able to:

  • Demonstrate a high-level knowledge of the basic elements of the general accounting model applied by IFRS 17
  • Articulate the key numbers that will be presented in the statements of profit or loss and financial position and how different they are to those under current practice
  • Communicate to others the story that the IFRS 17 numbers will be telling
  • Explain the main areas of difficulty that will most likely arise in practice

Session 1 setting the scene

  • Why IFRS 17?
  • Identifying insurance contracts, scope exclusions and unbundling
  • Worked example illustrating the difference between previous and IFRS 17 reporting practice
  • Identification of tricky application issues

Session 2 initial recognition

  • Portfolios, cohorts and groups- arriving at the unit of account
  • Initial recognition scenarios and journals
  • How to derive the required inputs

Session 3 general model – accounting for groups of profitable contracts

  • Initial recognition
  • Subsequent measurement
  • Financial statement presentation

Session 4 general model – accounting for groups of contracts that become onerous and those that are onerous from the start

  • Initial recognition
  • Subsequent measurement – focussing on the accounting treatment of loss components
  • Financial statement presentation

Session 5 the premium allocation approach

  • When can the PAA be used?
  • Initial recognition and subsequent measurement in all the scenarios featured in sessions 3 and 4

Session 6 reinsurance

  • An overview of the modified general model
  • NB this will include the changes in the current ED of amendments to IFRS 17
  • Initial recognition and subsequent measurement:
    • General model
    • Premium allocation approach

WHO SHOULD ATTEND

Anyone needing a understanding of this standard particularly the finance department, to legal teams, sales departments, etc.

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