The International Accounting Standards Board
(IASB) has decided to re-expose its proposals on the insurance
contract project which is intended to provide a single source of
principle-based guidance on insurance standards.
The IASB met last week and decided that
proposals should be re-exposed with feedback being sought only on a
limited range of questions.
IASB said the deliberations on the project are
not complete but given the late stage of the discussions, issuing a
new exposure draft will provide greater certainty to the
IASB chairman Hans Hoogervorst said that
insurance companies and pension funds are facing difficulties in
the current low interest environment.
“As such we realise the importance of
establishing a workable standard based on current measurement as
soon as possible. However, it is of equal importance that we get
this standard right,” Hoogervorst said.
The standard setter said it is looking for
comments in relation to the following requirements:
- treatment of participating contracts,
- presentation of premiums in the statement of comprehensive
- treatment of the unearned profit in an insurance contract,
- presenting, in other comprehensive income, the effect of
changes in the discount rate used to measure the insurance contract
- the approach to transition.
Hoogervorst added that a targeted re-exposure
is the right decision because limiting the scope of the feedback
avoids re-opening issues already agreed upon.