On 18 May 2017, the International Accounting Standards Board (IASB) issued IFRS 17, a fundamental overhaul of how to account for insurance contracts under IFRS.
The new standard replaces IFRS 4, an interim standard that allowed companies to continue accounting for insurance contracts under the accounting standards used prior to adoption of IFRS. This interim standard resulted in a wide variety of approaches across different countries, causing difficulty when comparing financial performance across companies.
As the first truly international IFRS standard for insurance contracts, IFRS 17 will help investors make these performance comparisons more accurately. IFRS 17 will be effective for financial statements after 1 January 2021, with early adoption permitted. Because of potential interactions between the changes required under IFRS 17 and the changes introduced under IFRS 9, companies can defer adopting IFRS 9 until they adopt IFRS 17.
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