Reply To: DISCLOSURE REQUIREMENTS OF IFRS 17
Sarthak Goel
IFRS requires a number of disclosures. Additional information relating to recognised amounts in the financial statements, significant judgements made while applying IFRS 17 and the nature and type of risk associated with insurance contracts is provided by IFRS 17.
➡️Recognized amount
a) Reconciliation between opening and closing balances of insurance and reinsurance contracts must be provided by companies by breaking it down into:
• liabilities for remaining coverage and liabilities for incurred claims.
• the estimates of the present value of future cash flows, the risk adjustment, and the remaining contractual service margin.
b) Expected time of recognition of remaining contractual service margin as a profit or loss.
c) Detailed analysis on:
• Insurance revenue
• Insurance finance income and expenses, etc.
➡️ Significant Judgements
a) The methods used for the measurement of insurance contracts and the process used for estimating inputs to these methods (also, quantitative information on inputs, if possible)
b) A change in the above-mentioned method or process and explanation for the same along with the contract affected by it
c) Yield curves used for discounting of cash flows
➡️ A sensitivity analysis of Insurance and market risks
a) Exposures to the risk and the way they arise
b) Policies and processes used for managing risks
c) Methods to measure risks
d) Liquidity Risk, etc.