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During 2022 the two standards will coexist in parallel to comply with the comparative period, until IFRS 17 is definitively and exclusively applied. IFRS 17 permits, but does not require, an entity to present adjusted comparative information applying IFRS 17 for any earlier periods presented. These could arise from the different transitional requirements of IFRS 17 and IFRS 9. An entity that chooses to apply paragraphs C28A-C28E and C33A shall apply them on initial application of IFRS 17. July 2014. under IFRS 17 timelines. 2. May 18, 2017. 7 Given the effective date of January 1, 2021 for the new IFRS standard, we recommend insurers start a change program based on a Target Operating Model (TOM), beginning with an impact It replaces IFRS 4 Insurance Contracts, an interim standard, which permitted insurers largely to continue to apply their existing (local) accounting practices. Focus on IFRS 17 compliance Delivering a robust and controlled environment to support reporting, disclosure and analysis under IFRS 17 must be the primary focus of your program in the run up to 2021 Additional business value Although IFRS 17 will by all accounts have widespread consequences for (re)insurers, and many firms are preparing for significant changes to their . The new accounting standard for insurance contracts, IFRS 17, will have wide-ranging implications for (re)insurers, and many firms are preparing for significant changes to their business operations. Page 5 Section 2 Definition and scope. However, IFRS 9 does not require financial assets to be restated for that same period. IFRS 17 specifies complex transition requirements for entities that are applying IFRS 17 for the first time. The proposed amendment applies to financial assets for which comparative information presented on initial application of IFRS 17 and IFRS 9 has not been restated for IFRS 9. The new standards will require entities that lease assets, or "lessees" to recognize on their balance sheets, assets, and liabilities of such leases. Claims in period €xx D) Expenses in period €xx E) Movement in technical . 3. Yes Overlay approach? January 1, 2022. Initial application of IFRS 17 and IFRS 9 - Comparative Information Publication date: 10 Dec 2021 gx In brief INT2021-15 Key points On 9 December 2021, the IASB issued the amendment of IFRS 17 relating to the presentation of comparative information of financial assets on initial application of IFRS 17, 'Insurance Contracts'. The International Accounting Standard Board (IASB) issued IFRS17 in May 2017, with an original effective date for the annual period beginning on or after 1 January 2021. IFRS 17 and IFRS 9 have different requirements for comparative information: IFRS 17 requires entities to present one restated comparative period. ESKA IFRS 17 Journey 15 ESKA implementation journey for the period spanning from 2021 to 2023 2021 -Q3 2021 - Q4 2022 -Q1 2022 - All Quarters 2023 Parallel run - comparative period Go Live/Production Start Here End Here Timeline Customers' gap collection & development Verification & training Training & UAT Start IFRS 17 comparative period IFRS 17 effective 1 January 2023 EU endorsement expected (2HY 2021) First IFRS 17 compliant annual reports published Implementation period Reporting From the EFRAG Endorsement Status Report: Status per 2 April 2021 EFRAG submitted Final Endorsement Advice to the EC on 31 March 2021 NEW NEW On 9 December 2021 the IASB issued the amendment to IFRS 17 relating to the presentation of comparative information of financial assets on initial application of IFRS 17, 'Insurance Contracts'. IFRS 17 is the first truly international, comprehensive accounting Standard for insurance, replacing IFRS 4 - an interim Standard that results in widely divergent practices. The following table summarises how the different Standards apply for an insurer with a 31 December year-end that voluntarily restates comparative information for IFRS 9 and begins applying IFRS 9 and IFRS 17 from 1 January 2023: Agenda ref 2 If the financial statements of the prior period were audited by a predecessor auditor, in addition to expressing an opinion on the current period's financial . Internal audit functions should also be challenging the business on the steps taken to ensure readiness for IFRS 17. Transition to IFRS 17 Insurance contracts - IFRS 17 should be applied for annual reporting periods beginning on or after 1 January 2021. However, if an entity restates more than one year of IFRS 17 comparatives, the classification overlay could apply to these periods as well Impacts of IFRS 17 insurance contracts accounting standard Considerations for data, systems and processes. However, it is not required to include narrative/descriptive information relating to preceding period if it is not relevant to understanding current period (IAS 1.38). Customized IFRS 17 model library to be operated by Aon Companies can outsource their IFRS 17 production processes to Aon for all its business units', where clients can choose the reporting format. Opening balance sheet for one-year-comparative reports. June 20, 2013. the comparative period disclosed Business as usual Ensure continuity and flexibility in the quarterly disclosure Strategy and assess Construct and implement Operate, review and of comparative figures as well as a presentation of an "opening balance sheet" as of the first day of the comparative period. Comparative information Publication date: 04 Nov 2020 gx In transition IFRSs require an entity to present one year of comparative information. Trends are determined from this historical data. IFRS 17: Risk Adjustment December 2017 INTRODUCTION The new insurance contracts accounting standard, IFRS 17 (or 'the Standard'), was published in May this year and is expected to be an area of significant focus over the next few years leading up to implementation ('the implementation period'). Yes Overlay Approach No Deferral First IFRS 9 Annual Financial statements WHY IFRS CHANGING MATTERS 4 Current regime Forthcoming The new standard was published in May last year, with an effective date of 1 January 2021. 3 FRSC PREFACE TO AMENDMENTS TO PFRS 17, INSURANCE CONTRACTS 1. No Yes First IFRS 9 annual financial statements IFRS 17 issued on 18 May 2017 2017 2018 Overlay approach 2020. The real deadline is January 2022—your IFRS 17 transition year. Timeline for IFRS 17 IFRS 9. Issued May 2017 Amendments June 2020 Effective date 1 Jan 2023 Comparative period IAS 8 disclosures -impact of IFRS 17 on the entity's financial statements in the period of initial application Today Potential IFRS 17 start of comparative period IFRS 17 & IFRS 9 effective date 1 Jan 2021 IFRS 9 Effective date Final IFRS 17 Standard published on 18 May Predominant insurance activities? Endorsement of IFRS 17 -will there be a global Standard? IFRS 17: A Challenge ahead for Insurers. A majority of IFRIC members agreed that the 'beginning of the earliest com­par­a­tive period' must be read in context of the minimum re­quire­ments within IFRSs. 2001 2004 2017 2019 2020 2023 Start of comparative period IFRS 17 effective date 1 Jan 2023 1 January 2021 is the date of . To be ready for 2023 you ideally need to have completed your implementation by January 2022 in order to generate the results for the 12-month transition period. The Financial Reporting Standards Council (FRSC) has approved on August 19, 2020 the adoption of amendments to IFRS 17 Insurance Contracts issued by the International Accounting Standards Board (IASB) in June 2020 as amendments to PFRS 17 Insurance Contracts. Many insurers in the UK have been re-planning recently given the deferral in the effective date, The ED proposes narrow-scope amendments to the IFRS 17 transition requirements for entities that first apply IFRS 17 and IFRS 9 at the same time. Potential IFRS 17 start of comparative period An impact assessment will tell you where existing practices will be challenged. With the start of the comparative period for IFRS 17 less than a year away, it's critical that foreign branches of both life and property and casualty (P&C) insurers have a clear path forward to implementing their IFRS 17 solution. As a rule, entities should present comparative information for the preceding period for all amounts reported in the current period, even without specific requirement in a given IFRS. At a glance . The main aim of IFRS 17 is to standardize insurance accounting globally to ensurethat users of accounts are able to make more sensible comparisons between companies. 1. Management and boards of directors should view . EY - Impacts of IFRS17 - Considerations for data, systems and processes. IFRS 17 ED issued. IFRS 17 start of comparative period IFRS 17 and IFRS 9 effective date 1 Jan 2022 IFRS 9 Effective date Predominant insurance activities? IFRS 17 Insurance Contracts is a major new accounting standard for insurance contracts. For firms with calendar year reporting . Page 5 Overview of IFRS 17 IFRS 17 is expected to improve financial reporting by providing meaningful and Transition to IFRS 17 Release Date: 30 October 2020 . IFRS 17 is effective for annual reporting periods beginning on or after 1 January 2023, with early application permitted. IFRS 17 that all future cash flows are reflected in the measurement of an insurance contract . Across the globe an unprecedented wave of new reporting and regulatory requirements are driving changes that are significantly impacting the way insurers manage . IFRS 17, Insurance Contracts . of comparative period IFRS 17 effective date 1 Jan 2021 TFRS 9 Effective date IFRS 17 standard issued Predominant insurance activities? 2. IFRS 17 Timeline Proposed Effective date IFRS 17 is effective from 1/1/2022 Proposed Transition date Start of the comparative period Exposure Draft 20th June 2013, the IASB issue the Revised Exposure Draft ED/2013/7 IFRS 17 Issued 18th May, IFRS 17: Insurance Contracts is issued Reporting 2022 Expected Exposure Draft statements refers to the current period only; whereas (b) For comparative financial statements, the auditor's opinion refers to . The IASB issued an Exposure Draft Initial Application of IFRS 17 and IFRS 9—Comparative Information on 28 July 2021. Apply to all the comparative period (s) restated for IFRS 17 Many entities will only present one year of restated comparatives for IFRS 17. Notwithstanding the reference to the annual reporting period immediately preceding the date of initial application in paragraph C2 (b), an entity may also present adjusted comparative information applying IFRS 17 for any earlier periods presented, but is not required to do so. No Deferral approach First TFRS 9 annual financial statements. 11 Classification overlay. 2020: IFRS 17 and IFRS 9 start of comparative period 2021: IFRS 4 and IFRS 17 and IFRS 9 parallel run 2022: First IFRS 17 and IFRS 9 -compliant financial statement to be published OUR TEAM 1002, Orchid Business Center - Building 2795, Road 2835, Block 428, Seef District, Kingdom of Bahrain | www.srco.ca Start IFRS 17 comparative period IFRS 17 effective 1 January 2023 EU endorsement expected (Q3/4 2021) First IFRS 17 compliant annual reports published Implementation period Reporting From the EFRAG Endorsement Status Report: Not indicated Last update on January 14th 2020 Deadline to provide views on If so, accounting mismatches may occur in respect of the comparative period, i.e. Communicating the IFRS 17 impact to the external market requires the following considerations: Communicating the impact on financial statements at initial application of IFRS 17 and IFRS 9. (paragraphs C25-C28 of IFRS 17) BC387 IFRS 17 requires entities to present comparative information, applying the requirements of IFRS 17 for the period immediately before the date of initial application of IFRS 17, to provide the most useful information to users of financial statements by allowing comparisons among entities and using trend information. IFRS 9 comparative period IFRS 17 standards issued 2018 HKRBC QIS 2 IFRS 9 effective date 2019 HKRBC QIS 3 2020 IFRS 9 deferred comparative period Pillar 1 legislative process Pillar 2 effective 2021 IFRS 9 deferred effective IFRS 17 effective ORSA report first submission 2022 HKRBC effective. Entities will need to evaluate the choices that are available to them and exercise judgement in applying many of the requirements. Thus, there should be a restatement of all values for the comparative period. FRS 17 supersedes IFRS 4 [IFRS 17 C34]. IFRS 17 refresher Reinsurance under IFRS 17 Impact on reinsurance strategy 4 IFRS 17 timeline Proposed Effective date IFRS 17 is effective from 1/1/2022 Proposed Transition date Start of the comparative period Exposure Draft 20thJune 2013, the IASB issue the Revised Exposure Draft ED/2013/7 IFRS 17 Issued 18thMay, IFRS 17: Insurance Contracts . During that year leading up to final launch, you need your solution up and running so that it can generate the required . Background. Companies subject to its implementation know the hard work they will have to do and the time this implementation may take in the areas of IT, actuarial, accounting and risk. into IFRS. IFRS 17 represents a paradigm shift in the reporting of insurance contracts by improving comparability and better reflecting the economic reality. IFRS 17 issued IFRS 17 start of comparative period IFRS 17 effective 1 January 2021 Revised IFRS 9 classification from IFRS 17 implementation* First IFRS 17- compliant financial statements *Unless IFRS 17 will be deferred based on the conditional deferral option. IFRS 9 permits but does not require restatement of comparative periods, and prohibits entities from applying IFRS 9 to financial assets derecognized in the comparative period. Initial Application of IFRS 17 and IFRS 9—Comparative Information , issued in December 2021, added paragraphs C28A-C28E and C33A. 2IFRS 17: what to do now Implications for European insurers The ED proposed a narrow-scope amendment to the IFRS 17 transition requirements for entities that first apply IFRS 17 and IFRS 9 at the same time. IFRS 17 requires a philosophical change in every aspect of an insurer's business —from what it means to earn insurance revenue to what the key drivers of financial performance are. 17. October 25, IFRS 17 Comment deadline ended. requirements in IFRS 9 had been applied. IFRS 17 offers forward-thinking organizations a rare opportunity to rethink their operations from the ground up. The ED proposes a narrow-scope amendment to IFRS 17 Insurance Contracts to allow a classification overlay for financial assets in the comparative period if certain conditions are met. programme assurance on the IFRS 17 implementation process. This draft addresses an implementation issue, which arises when an (insurance) entity initially applies both IFRS 17 and IFRS 9 in the same reporting period, e.g. IFRS 17 requires companies to present one restated com­par­a­tive period. IFRS 17 supersedes IFRS 4. IFRS 9 (Financial Instruments) and 17 (Insurance Contracts) are highly interdependent for insurers, hence timing of the standards is aligned by the IASB Ongoing IASB deliberations Implementation period Reporting S 17 5 Potential IFRS 17 Final standard Potential IFRS 17 effective date 1 Jan 2021 (**) Potential IFRS 17 start of comparative period NEW. 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