Superseded by IFRS 17: Insurance Contracts, para.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.
BC195 Some respondents suggested that financial instruments issued by one entity to a life insurer in the same group should not be eliminated from the group’s consolidated financial statements if the life insurer’s assets are earmarked as security for policyholders’ savings.
BC196 The Board noted that these financial instruments are not assets and liabilities from the group’s perspective. The Board saw no justification for departing from the general principle that all intragroup transactions are eliminated, even if they are between components of an entity that have different stakeholders, for example policyholder funds and shareholder funds. However, although the transactions are eliminated, they may affect future cash flows. Hence, they may be relevant in measuring liabilities.
BC197 Some respondents argued th
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