BC288 The financial statements of insurers that apply the overlay approach or the temporary exemption from IFRS 9 will not be directly comparable with entities that apply IFRS 9. Furthermore, making those two approaches optional also reduces comparability among entities. However, the Board has sought to mitigate the concerns about comparability by deciding the following:

(a) the effect of the overlay approach must be presented as a separate line item in profit or loss and in OCI, separately from other components of OCI. This will help users of financial statements to compare entities that apply the overlay approach and those that apply IFRS 9 without the overlay approach.

(b) the scope of the temporary exemption is restricted with the intention that any reduction in comparability affects only peers within the insurance sector. In addition, based on the feedback received, the Board expects that in a particular jurisdiction, insurers that qualify for the temporary exemption would select the same options relating to the overlay approach or the temporary exemption, which would improve comparability in practice within a jurisdiction.