The overlay approach

35B An insurer is permitted, but not required, to apply the overlay approach to designated financial assets. An insurer that applies the overlay approach shall:

(a) reclassify between profit or loss and other comprehensive income an amount that results in the profit or loss at the end of the reporting period for the designated financial assets being the same as if the insurer had applied IAS 39 to the designated financial assets. Accordingly, the amount reclassified is equal to the difference between:

(i) the amount reported in profit or loss for the designated financial assets applying IFRS 9; and

(ii) the amount that would have been reported in profit or loss for the designated financial assets if the insurer had applied IAS 39.