Insurance Accounting Newsletter - May 2014
IASB redeliberations start apace: decisions on CMS unlocking, OCI solution and revenue presentation achieved in two months
The International Accounting Standards Board (IASB) has continued its redeliberation to produce the first comprehensive International Reporting Standard (IFRS) on Insurance Contracts based on the comments received in its 2013 Exposure Draft (ED) which, by November 2013, had attracted nearly 200 comments letters.
Tre redeliberation process seems to have started apace in the Board meetings held in March and April, with the IASB having made tentative decisions in three of the five areas for which comments were sought:
- Unlocking of the contractual service margin (CSM);
- Presenting the effect of changes in discount rates in other comprehensive income (OCI solution); and
- Presentation of insurance revenue and expenses other than when the Premium Allocation Approach is permitted and adopted by the insurer.
Insurance companies have been waiting over a decade for a single global accounting standard that fits their unique and complex industry. Deloitte understands the insurance industry and its need to gain improved economies of scale and minimize duplication through mandated regulatory change.
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