Superseded by IFRS 17: Insurance Contracts, para. C34, May 2017, for annual periods beginning on or after 1 January 2023. Earlier application is permitted, see App. C.
Impairment of reinsurance assets
BC107 ED 5 proposed that a cedant should apply IAS 36 Impairment of Assets to its reinsurance assets. Respondents opposed this proposal for the following reasons:
(a) This would compel many cedants to change their accounting model for reinsurance contracts in a way that is inconsistent with the accounting for the underlying direct insurance liability.
(b) IAS 36 would require the cedant to address matters that are beyond the scope of phase I for the underlying direct insurance liability, such as the cash flows to be discounted, the discount rate and the approach to risk. Some saw IAS 36 as an indirect way of imposing something similar to a fair value model. There would also have been systems implications.
(c) Reinsurance assets are essentially a form of financial asset and should be sub
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