RegulationAccounting StandardsIASB proposals aim to demystify insurance accounting

IASB proposals aim to demystify insurance accounting

IASB chief describes current rules as "impenetrable"

The international accounting standard setter has released new proposals for
insurance contracts which seek to demystify one of the most complex areas of
company reporting.

The rules aim to transform current rules, said to be all but indecipherable
for investors, to a model which helps to communicate the contract economics.

David Tweedie, chairman of the International Accounting Standards Board,
described new rules as long overdue and believes the proposals will better
reflect the substance of insurance transactions.

“Current practice [results] in financial information that is impenetrable to
all but the most expert of users,” he said.

“The proposed standard better reflects the economics of insurance contracts,
and would result in more relevant, understandable and comparable information
being available to investors.”

The board has proposed a “building block approach” which focuses on the

timing and uncertainty of future cash flows and relies on drivers of
profitability.

The proposals will be exhibited for comment until 30 November.

Further reading:

IASB
proposes improvements to insurance accounting

SNAPSHOT:
Insurance Contracts

Related Articles

IASB overhauls insurance accounting with issuance of IFRS 17

Accounting Standards IASB overhauls insurance accounting with issuance of IFRS 17

7m Alia Shoaib, Reporter
Former CFO joins IASB board

Accounting Standards Former CFO joins IASB board

1y Stephanie Wix, Writer
MEP calls for IASB pay cuts

Accounting Standards MEP calls for IASB pay cuts

1y Richard Crump, Writer
IASB issues amendments to insurance contracts standard

Accounting Standards IASB issues amendments to insurance contracts standard

1y Richard Crump, Writer
IASB chairman Hoogervorst to prioritise communication effectiveness of financial statements during second term

Accounting Standards IASB chairman Hoogervorst to prioritise communication effectiveness of financial statements during second term

1y Richard Crump, Writer
IFRS Foundation to cut board size and improve transparency

Accounting Standards IFRS Foundation to cut board size and improve transparency

1y Richard Crump, Writer
Indonesia set to achieve full IFRS convergence

Accounting Standards Indonesia set to achieve full IFRS convergence

2y Calum Fuller, Reporter
FASB publishes US leasing standard

Accounting Standards FASB publishes US leasing standard

2y Calum Fuller, Reporter