Following the announcement by the International Accounting Standards Board (IASB) to defer the effective date of International Financial Reporting Standard (IFRS) 17 - insurance contracts - to annual reporting periods beginning on or after 1 January 2023, Olav Jones, deputy director general of Insurance Europe said:
"We welcome the decision to postpone the effective date of IFRS 17 and to extend the exemption currently in place regarding the application of IFRS 9 - financial instruments - to 2023, which will enable insurers to implement both standards at the same time. IFRS 17 introduces numerous and fundamental changes to balance sheet measurement and P&L presentation. These will require significant thought and development relating to modelling, data, actuarial resources, IT systems, staff training and investor communications. In addition, postponing the effective date allows for a globally consistent adoption date."
There is no expectation that a two-year delay will stop or slow down implementation projects. Rather it will allow companies, including smaller entities, to cope with real operational constraints and, where relevant, regulatory impacts.
"However, while we appreciate that the effective dates of IFRS 17 and IFRS 9 have been postponed and that progress has been made on a number of the industry's other issues, we are disappointed that the IASB has decided not to address concerns about the annual cohorts requirement and has also left other industry issues unresolved."