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IFRS 17: Insurance ContractsIntroduction (IN1-IN8)Objective (paras. 1-2)Scope (paras. 3-13)Level of aggregation of insurance contracts (paras. 14-24)Recognition (paras. 25-28F)Measurement (paragraphs B36-B119F) (paras. 29-71)Modification and derecognition (paras. 72-77)Presentation in the statement of financial position (paras. 78-79)Recognition and presentation in the statement(s) of financial performance (paragraphs B120-B136) (paras. 80-92)Disclosure (paras. 93-132)Appendix A Defined termsAppendix B Application guidanceAppendix C Effective date and transitionAppendix D Amendments to other IFRS StandardsApproval by the International Accounting Standards Board of IFRS 17 Insurance Contracts issued in May 2017Approval by the International Accounting Standards Board of Amendments to IFRS 17 issued in June 2020Approval by the Board of Initial Application of IFRS 17 and IFRS 9 - Comparative Information issued in December 2021IFRS 17: Basis for ConclusionsThe need to change previous accounting and history of the project (paras. BC1-BC15)BC1History of the project (paras. BC2-BC6C)The need for a new approach (paras. BC7-BC15)Overview of the approach taken in the Standard (paras. BC16-BC62)BC16-BC17Measurement of insurance contracts and recognition of profit (paras. BC18-BC26)Presentation of insurance revenue (paragraphs 83, 85 and B120-B127 of IFRS 17) (paras. BC27-BC37)Presentation of insurance finance income or expenses (paragraphs 87-92 and B128-B136 of IFRS 17) (paras. BC38-BC49)Pervasive issues (paras. BC50-BC62)Scope of the Standard and definition of insurance contracts (paragraphs 3-8A and B2-B30 of IFRS 17) (paras. BC63-BC97)BC63-BC66Definition of an insurance contract (paragraph 6, Appendix A and paragraphs B2-B30 of IFRS 17) (paras. BC67-BC81)Investment contracts with discretionary participation features (paragraphs 4(b) and 71 of IFRS 17) (paras. BC82-BC86)Scope exclusions (paragraphs 7-8A of IFRS 17) (paras. BC87-BC97)Separating components from an insurance contract (paragraphs 10-13 and B31-B35 of IFRS 17) (paras. BC98-BC114)BC98-BC103Embedded derivatives (paragraph 11(a) of IFRS 17) (paras. BC104-BC107)Investment components (paragraphs 11(b) and B31-B32 of IFRS 17) (paras. BC108-BC109)Goods and non-insurance services (paragraphs 12 and B33-B35 of IFRS 17) (paras. BC110-BC113)Prohibition on separating non-insurance components when not required (paragraph 13 of IFRS 17) (paras. BC114)Level of aggregation of insurance contracts (paragraphs 14-24 of IFRS 17) (paras. BC115-BC139T)Background (paras. BC115-BC118)Characteristics of a group (paras. BC119-125)Practical considerations (paras. BC126-BC139T)Recognition (paragraphs 25-28F of IFRS 17) (paras. BC140-BC145A)BC140-BC145AMeasurement of fulfilment cash flows (paragraphs 29-37 and B36-B92 of IFRS 17) (paras. BC146-BC217)BC146Estimates of future cash flows (paragraphs 33-35 and B36-B71 of IFRS 17) (paras. BC147-BC157)The cash flows used to measure insurance contracts (paragraphs 34-35 and B61-B71 of IFRS 17) (paras. BC158-BC184N)Discount rates (paragraphs 36 and B72-B85 of IFRS 17) (paras. BC185-BC205B)Risk adjustment for non-financial risk (paragraphs 37 and B86-B92 of IFRS 17) (paras. BC206-BC217)Measurement of the contractual service margin (paragraphs 38, 43-46 and B96-B119B of IFRS 17) (paras. BC218-BC287)BC218-BC221Changes in estimates of the future unearned profit (paragraphs 44, 45 and B96-B118 of IFRS 17) (paras. BC222-BC226)Insurance contracts without direct participation features (paragraphs 44 and B96-B100 of IFRS 17) (paras. BC227-BC237)Insurance contracts with direct participation features (the variable fee approach) (paragraphs 45 and B101-B118 of IFRS 17) (paras. BC238-BC269C)Insurance finance income or expenses on the contractual service margin (paragraphs 44(b) and 45(b) of IFRS 17) (paras. BC270-BC276E)Foreign currency (paragraph 30 of IFRS 17) (paras. BC277-BC278)Recognition in profit or loss (paragraphs 44(e), 45(e) and B119-B119B of IFRS 17) (paras. BC279-BC283J)Onerous contracts (paragraphs 47-52 of IFRS 17) (paras. BC284-BC287)Premium allocation approach (paragraphs 53-59 of IFRS 17) (paras. BC288-BC295)Reinsurance contracts (paragraphs 60-70A of IFRS 17) (paras. BC296-BC315L)BC296-BC303Recognition for groups of reinsurance contracts held (paragraphs 62-62A of IFRS 17) (paras. BC304-BC305A)Derecognition of underlying contracts (paragraphs 74-75 of IFRS 17) (para. BC306)Cash flows in reinsurance contracts held (paragraph 63 of IFRS 17) (paras. BC307-309F)Gains and losses on buying reinsurance (paragraphs 65-65A, 66A-66B and B119D-B119F of IFRS 17) (paras. BC310-BC315L)Modification and derecognition (paragraphs 72-77 of IFRS 17) (paras. BC316-BC322)BC316Modifications that would have resulted in significantly different accounting for the contract (paragraphs 72, 76 and 77 of IFRS 17) (paras. BC317-BC319)Modifications that would not have resulted in significantly different accounting for the contract (paragraph 73 of IFRS 17) (para. BC320)Derecognition (paragraphs 74-75 of IFRS 17) (paras. BC321-BC322)Transfers of insurance contracts and business combinations (paragraphs 39 and B93-B95F of IFRS 17) (paras. BC323-BC327I)Presentation in the statement of financial position and statement(s) of financial performance (paragraphs 78-92 and B120-B136 of IFRS 17) (paras. BC328-BC346)BC328-BC330Amendments to IFRS 17 - presentation in the statement of financial position (paras. BC330A-BC330D)Presentation of insurance revenue (paras. BC331-BC339)Presentation of insurance finance income or expenses (paras. BC340-BC346)Disclosure (paragraphs 93-132 of IFRS 17) (paras. BC347-BC371)BC347-BC349Explanation of recognised amounts (paragraphs 97-116 of IFRS 17) (paras. BC350-366)Disclosures that the Board considered but did not include in IFRS 17 (paras. BC367-371)Applying the Standard for the first time (Appendix C of IFRS 17) (paras. BC372-BC407)BC372-BC373BRetrospective application (paragraphs C3-C5B of IFRS 17) (paras. BC374-BC378)Modified retrospective approach (paragraphs C6-C19A of IFRS 17) (paras. BC379-BC384B)Fair value approach (paragraphs C20-C24B of IFRS 17) (paras. BC385-BC386)Comparative information (paragraphs C25-C28 of IFRS 17) (paras. BC387-BC389A)Other transition issues (paras. BC390-BC398R)Transition disclosures (paragraphs 114-116 of IFRS 17) (paras. BC399-BC401)Effective date (paragraphs C1 and C2 of IFRS 17) (paras. BC402-BC404F)Early application (paragraphs C1 and C2 of IFRS 17) (paras. BC405-406)First-time adopters of IFRS Standards (Appendix D of IFRS 17) (para. BC407)Appendix A Summary of changes since the 2013 Exposure DraftAppendix B Amendments to the Basis for Conclusions on other IFRS StandardsAppendix C List of amendments issued in 2020IFRS 17: Illustrative Examples
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Version date: 25 June 2020 - onwards
Version 2 of 2

Insurance contracts without direct participation features (paragraphs 44 and B96-B100 of IFRS 17) (paras. BC227-BC237)

(paragraphs 44 and B96-B100 of IFRS 17)

BC227 In determining which changes in estimates relate to future service, IFRS 17 distinguishes two types of insurance contracts: those without direct participation features and those with direct participation features. Insurance contracts with direct participation features are discussed in paragraphs BC238-BC269C.

Time value of money and changes in assumptions relating to financial risk (paragraph B97(a) of IFRS 17)

BC228 For insurance contracts without direct participation features, the Board concluded that changes in the effects of the time value of money and financial risk do not affect the amount of unearned profit. This is the case even if the payments to policyholders vary with returns on underlying items through a participation mechanism, for the reasons set out in paragraphs BC229-BC231. Accordingly, the entity does not adjust the contractual service margin to reflect the effects of changes in these assumptions.

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