Reply To: IFRS17
Vanshika Gupta
1) IFRS 17 provides one accounting policy for all insurance contracts which were earlier different for different contracts and thus improved comparability by maintaining global consistency.
2) IFRS 17 works in compliance and in interaction with other standards so as to improve comparability globally of different companies. eg- It works in interaction with IFRS 9 so as to enhance comparability with banking sector.
3) IFRS 17 requires a company to recognise profit only when the insurance service is provided and not when premiums are received according to the way it is earned from:
(a) the contractual service margin—recognised as profit as the company provides services over the coverage period; and
(b) the risk adjustment—recognised in profit or loss as the company is released from risk over the coverage period and the settlement period.
IFRS 17 requires a consistent approach for the recognition and measurement of the contractual service margin, and for the determination of explicit risk adjustments.
By recognizing the revenue when it’s earned will provide a true and fair view of the financial position of the company.
4) Companies and users of financial statements wouldn’t have to make much use of non-GAAP measures.