(paragraphs 83, 85 and B120-B127 of IFRS 17)

BC27 The determination of revenue under previous insurance accounting practices varied across jurisdictions and often resulted in the presentation of revenue amounts that could not be easily compared with the information reported by other entities, either in the insurance industry or in other industries. Two common factors that resulted in this lack of comparability were:

(a) the accounting of deposits as revenue; and

(b) the recognition of revenue on a cash basis.

BC28 In contrast, IFRS 17 requires entities to present revenue for insurance contracts determined in a way that is broadly consistent with the general principles in IFRS 15. Consistent with that Standard, an entity depicts revenue for the transfer of promised coverage and other services at an amount that reflects the consideration to which the entity expects to be entitled in exchange for the services. This means that the entity:

(a) excludes from insurance revenue any investment components; and

(b) recognises insurance revenue in each period as it satisfies the performance obligations in the insurance contracts.