Effective date of IFRS 17 Insurance Contracts to be deferred by two years
On 25 June 2020, the International Accounting Standards Board (IASB) issued amendments to IFRS 17 Insurance Contracts, deferring the effective date from annual periods beginning on or after 1 January 2021 to 1 January 2023. For entities that have elected to defer IFRS 9 Financial Instruments, the mandatory effective date has also been deferred until 1 January 2023.
In New Zealand, the New Zealand Accounting Standards Board (NZASB) has followed suite and amend the effective date of NZ IFRS 17 Insurance Contracts (and the corresponding Public Benefit Entity Standards – PBE IFRS 17 Insurance Contracts) to annual periods beginning on or after 1 January 2023.
Why has the IASB amended IFRS 17?
The IASB has amended IFRS 17 to:
- Reduce costs (some requirements have been simplified to reduce costs such as systems development costs)
- To make results easier to explain, and
- To ease transition (the deferred application date gives insurers more time to prepare for first-time adoption of IFRS 17 and in some cases, IFRS 9 as well, and also provides more transition reliefs to reduce complexity of applying IFRS 17 for the first time).
Please refer to our International Financial Reporting Bulletin (IFRB 2020 10) for more information.