In the paper, the IASB staff propose a narrow scope amendment to IFRS 17 that would allow an entity to measure assets derecognised in the comparative period at fair value through profit or loss for the purpose of presenting comparative information. This option would apply if:
- the financial assets are related to insurance contract liabilities;
- applying the option would eliminate or significantly reduce an accounting mismatch; and
- the information used to determine the fair value can be obtained without the use of hindsight.
CFOF IE letter to IASB on Agenda paper 2 IASB meeting May 2021 – Initial application of IFRS 17.pdf
27.5.2021
Revised IASB Staff paper on the treatment of financial asset information in the comparative period on transition to IFRS 9 and IFRS 17, which was updated following receipt of the most recent joint letter from the CFO Forum and Insurance Europe. In the paper, the IASB Staff suggest a discussion of a narrow scope amendment to IFRS 17 to add a classification overlay that would:
- permit an insurer to elect to apply the classification overlay that would achieve greater consistency with the classification determined on initial application of IFRS 9
- apply only to a financial instrument that is related to insurance liabilities and only if the information required to apply the overlay is possible without the use of hindsight.
The IASB Board approved the approached proposed by the IASB staff in this paper and will work to provide a narrow scope amendment to IFRS 17 before the end of the year to solve the issue raised by the industry regarding the presentation of comparatives for first time adoption of IFRS 17 and IFRS 9.