Paper from the EC’s Accounting Regulatory Committee of 13 December 2018 outlining the latest European Commission views on the IFRS 17 topic.
This is both in respect to timing/process but also regarding the European political approach if key issues, including those identified by EFRAG are not addressed and the need for Europe to take an active stance and analyze these issues further in the context of the endorsement and the IASB re-deliberations of issues.
Key points include:
“In light of the one-year deferral of the implementation date of IFRS 17 and the additional standard setting activities undertaken by the IASB, the European Commission considers inappropriate to endorse the standard issued in May 2017 separately from any forthcoming amendment that might significantly affect the cost benefit balance of implementing the standard. Should the IASB confirm its willingness to amend IFRS 17, the EFRAG endorsement advice would therefore have to be postponed until the IASB finalizes a revised standard, possibly in the middle of 2020. If the IASB does not complete its forthcoming amendments within a timeframe consistent with both the European endorsement procedure and the one-year deferral of the implementation date, it may be necessary to consider a later implementation date.”
“Furthermore, the IASB may not consider amendments addressing all the major concerns identified as part of the EFRAG impact assessment of IFRS 17. Therefore, the European Union should keep an active stance in the future discussions pertaining to the standard.”
“Accordingly, a research project might be undertaken to follow-up some or all of the relevant concerns identified by the EFRAG Board and devise targeted improvements to IFRS 17 with a view to providing input to the IASB’s work. The scope of this project might especially encompass the issues raised in the EFRAG Board letter to the IASB that might remain unaddressed. It could also further investigate the interactions between IFRS 9 – Financial Instruments and IFRS 17 and assess more in depth the potential consequences on long-term investments.”