Financial statements of those applying IFRS (paras. BC285-BC287)
Superseded by IFRS 17: Insurance Contracts, para.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.
BC285 The Amendments to IFRS 4 would affect only those insurers that have not applied IFRS 9 (other than the requirements for the presentation of gains and losses on financial liabilities designated as at FVPL). Accordingly, non-insurers, or insurers that have already applied IFRS 9, will not be affected by the changes.
BC286 The Amendments to IFRS 4 introduce the overlay approach - the option to reclassify between profit or loss an amount equal to the incremental effect on profit or loss of applying IFRS 9 to designated financial assets until the insurer applies the forthcoming insurance contracts Standard. That approach will affect the financial statements as follows:
(a) the overlay approach will change the reported profit or loss and total OCI. However, the overlay approach will not change the carrying amounts reported on the statement of financial position, nor will it change total comprehensive income.
(b) insurers will present a line item for the amount reclassified in the statement of profit or loss, and in OCI separately from other components of OCI.
(c) insurers will provide disclosures to explain how the overlay adjustment is calculated and the effect of that adjustment on the financial statements.