BC16 IFRS 17 reflects the Board's view that an insurance contract combines features of both a financial instrument and a service contract. In addition, many insurance contracts generate cash flows with substantial variability over a long period. To provide useful information about these features, the Board developed an approach that:

(a) combines current measurement of the future cash flows with the recognition of profit over the period that services are provided under the contract (see paragraphs BC18-BC26);

(b) presents insurance service results (including presentation of insurance revenue) separately from insurance finance income or expenses (see paragraphs BC27-BC37); and

(c) requires an entity to make an accounting policy choice at a portfolio level of whether to recognise all insurance finance income or expenses in profit or loss or to recognise some of that income or expenses in other comprehensive income (see paragraphs BC38-BC49).