There are more than a few eye-catching headliners around about IFRS 17 – “a whole new perspective”, “a game changer”,” a light shining through darkness”, “the dawn of a new era”- all of which, of course are true.
IFRS 17 is a big, new standard for a big, old industry. It changes fundamentally the way in which an insurance entity reports its financial dimensions and results for a given period and over time. After investing 20 or so years of development effort into IFRS 17, the IASB are highly confident in their expectation that it will bring greater transparency and comparability about the profitability of both new and existing insurance contract business. The requirement to report the insurance and financial result separately will not only help to achieve this expectation but will also provide analysts and others with better information about the overall quality of insurance entity earnings.
The impact on individual insurance entities will be highly variable depending on their previous policies and practice, and the nature of the insurance business they contract, especially whether it is short tailed or life. There will consequently be many and varied impacts on the reported numbers and metrics.
Preparing for and implementing IFRS 17 will be problematic and challenging. It will require considerable effort to gain an initial understanding of the impact on the reported numbers as well as the upgrades to process and systems to ensure they can provide IFRS 17 compliant data. This will require, from an early stage, coordination and dialogue between functions such as Actuarial, Finance and IT in executing an IFRS 17 implementation project. Furthermore, dialogue with business users and investors should be early and extensive in order to minimise the possibility of and impact of any “unpleasant surprises”.
Our course is designed to help kick off these processes. It is aimed at not only preparers and users of accounts but also implementation team members and will help them get to grips with IFRS 17 by providing, at the very least, an initial working knowledge of the rules, how the numbers are constructed and presented and the story that they are telling.
Who should attend?
- This course is designed for those who wish to learn about the critical technical differences between the accounting and reporting requirements of existing IFRS 4 (and industry practice) and IFRS 17.
- It will be highly relevant to finance and actuarial team members preparing for the changed in insurance contract accounting practice.
- The course is designed for executive officers, industry controllers, analysts, actuaries, auditors and finance professionals who wish to gain a working knowledge of this large new standard
- Minimize the learning curve for getting up to speed on IFRS 17
- Appreciate the major technical differences between the existing IFRS 4 and IFRS 17 requirements
- Evaluate the significant impact of these differences through the use of real-world financial statements
- Providing a vital first time appreciation of IFRS 17 that will help to plan ahead for its implementation
- Evaluate the method and timetable for transition to IFRS 17.
Introductions, objectives and background
- Course objectives
- The journey from IFRS 4 to IFRS 17
- IFRS 17 objectives
Scope and definitions
- IFRS 17 scope exclusions
- Identifying insurance contracts and insurance risk
- Unbundling non-insurance elements contained within contracts with customers
Determining the unit of account – aggregation and groups of contracts
- Time related cohorts
- Groups of contracts – the unit of account
IFRS 17 accounting models
- Outline of the accounting models available
- A simple numerical introduction to the general model
- Explanation and illustration of the “building blocks” approach
IFRS 17 measurement and presentation – the general model
- The general model explained step by step with worked examples
- Initial recognition
- Subsequent measurement
- Presentation in the statement of comprehensive income
IFRS 17 measurement and presentation – the premium allocation approach
- The PAA - initial recognition and subsequent measurements explained step by step with worked examples
IFRS 17 measurement and presentation – modifications to the general model
- Accounting for reinsurance contracts held
- Contracts with direct participation features
- Contracts with discretionary participation features
- Contract modifications
- Derecognition of insurance contracts
- Explanation and illustration of the three IFRS 17 approaches:
- Fully retrospective
- Modified retrospective
- Fair value
- Transition disclosures
IFRS 17 presentation and disclosure
- Presentation in the primary financial statements
- A detailed review of the disclosure regime applied by IFRS 17
- Identification new data requirements to comply
- An awareness of basic accounting principles applied by any national set of standards.
- No advance preparation is required for this course.
- Group live instruction with interactive participation encouraged, cases, examples, group work and Course benefits open discussions
- Presentation and comparison of existing and new rules for insurance contract accounting
- Use of real-world financial statements (to the extent available) and case studies to illustrate different practices
- Discussion of issues such as how to group insurance contracts, the forecasting of fulfilment cash flows, how to estimate the discount rate, loss recognition and the different transitional approaches
- All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course material