IFRS Flashcards

1
Q

describe IFRS

A

International Financial Reporting Standards (IFRS) is a single set of global financial standards issued by the International Accounting Standards Board (IASB)

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2
Q

describe IFRS 4

A
  • intended to provide limited improvements to accounting for insurance contracts until the IASB completed the second, more comprehensive phase of its insurance accounting project
  • allowed insurers to use a variety of accounting practices reflecting differences in national accounting requirements
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3
Q

describe IFRS 17

A
  • standard to replace IFRS 4, effective 1/1/2023
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4
Q

primary objectives of IFRS 17 (2)

A
  • improve comparability between insurers

* improve quality of financial information

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5
Q

scope of IFRS 17 (3)

A
  • insurance and reinsurance contracts issued
  • reinsurance contracts held
  • investment contracts with discretionary participation features
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6
Q

IFRS 17 definition of insurance contract

A

contract under which the insurer accepts significant insurance risk from the policyholder by agreeing to compensate the policyholder if a specified future event
adversely affects the policyholder

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7
Q

IFRS 17 model for measuring insurance liabilities

A
  • default model is the General Model, consisting of two items:
    • present value of future insurance cash flows with a provision for risk
    • “contractual service margin” offsets the gain and is amortized over the life of the contract
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8
Q

two variations of IFRS General Model

A
  • Premium Allocation Approach (PAA)

* Variable Fee Approach (VFA)

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