 |
International Financial
Reporting Standards (IFRS) |
|
| U.S. GAAP | IFRS, IAS | Accounting Topics |
International Financial Reporting Standard (IFRS) 4
Insurance Contracts
International Financial
Reporting Standards (IFRS) |
|
International Accounting
Standards (IAS) |
|
U.S. GAAP by Topic |
| International Financial Reporting Standard (IFRS) 4 |
|
IFRS 4
Insurance Contracts
Issued in March 2004
Recent amendment: by IFRS 3 revised in January 2008 |
|
What is an insurance contract? --> a contract --> the insurer accepts insurance risk --> from the policyholder --> the insurer pays the policyholder --> if the insured event affects the policyholder (adversely) |
|
Deposit component --> if an insurance contract has both (1) an insurance component and (2) a deposit component, --> unbundling rules apply. |
|
Unbundling rules (Q1) can an insurer measure the deposit component separately? (Q2) do the insurer's accounting policies require to recognise all obligations and rights from the deposit component? (1) if the answer to (Q1)=no, --> unbundling is prohibited (2) if the answer to (Q1)=yes, and the answer to (Q2)=yes, --> unbundling is permitted, --> but not required (3) if the answer to (Q1)=yes, and the answer to (Q2)=no, --> unbundling is required |
|
Unbundling an insurance contract --> insurer applies (1) IFRS 4 to the insurance component (2) IAS 39 to the deposit component |
|
Liability adequacy test --> at the end of each reporting period, --> insurer assesses --> whether insurance liabilities are adequate (to cover the estimated future cash flows) |
|
If the carrying amount of insurance liabilities --> is inadequate, --> recognise the (entire) deficiency in profit or loss |
