IFRS 17 changes fundamentally the way in which insurance contracts are accounted for over time. After investing 20 or so years of development effort into IFRS 17, the IASB expectation is that it will bring greater transparency about the profitability and financial position resulting from conducting insurance contract business.
Preparing for and implementing IFRS 17 is problematic and challenging, requiring considerable effort to gain an initial understanding of the impact on the reported numbers as well as identifying upgrades to processes and systems to ensure they can provide IFRS 17 compliant data.
This one day course will commence with a review of the basics of the general accounting model for insurance contracts using a worked numbers example. This will be followed by a consideration of the main areas of difficulty that will arise in practice in applying the model to insurance contracts. These and the IFRS 17 solution to them will be illustrated (where appropriate) with further numbers examples which will be worked through interactively with the participants.
By the end of the course participants will be able to:
Demonstrate a working knowledge of the basic elements of the general accounting model applied by IFRS 17
Articulate the key numbers that will be presented in the statements of profit or loss and financial position and how different they are to those under current practice
Communicate to others the story that the IFRS 17 numbers are telling
Explain the main areas of difficulty that will most likely arise in practice
Articulate the permitted modifications to the general model, in particular the premium allocation approach
Demonstrate the timetable for transition to IFRS 17 and explain the processes and pros and cons of the different options available.
Introductions, objectives, background and scope
Introductions and course objectives
Background to IFRS 17
Identifying insurance contracts and groups of insurance contracts for accounting purposes
How to identify insurance contracts
Separation of non-insurance elements
Portfolios, cohorts and groups- how to arrive at the unit of account
Out with the old and bring in the new – the basics of the general model explained
Worked example illustrating the difference between previous and IFRS 17 reporting practice
Discussion of the main inputs and their variability
Review, discussion and illustration of problem areas that will arise in practice in applying the general model
Onerous contracts and loss components
Discounting and the time value of money
Cash flow estimation framework
Accounting for changes in the cash flow estimates and the NFRA
The premium allocation approach
The PAA explained step by step with worked examples
Other significant topics
Contracts with participation features
Modifications and derecognition
Explanation and illustration of the IFRS 17 approaches available
WHO SHOULD ATTEND
Anyone needing a understanding of this standard particularly the finance department, to legal teams, sales departments, etc.
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