The International Accounting Standards Board (IASB) has published for comment ED/2013/7 Insurance Contracts, a revised Exposure Draft of proposals for the accounting for Insurance Contracts.
The Exposure Draft builds upon proposals published in 2010, and reflects feedback received during the extensive public consultation period that followed the publication of those proposals.
While the model presented in the 2010 Exposure Draft was broadly supported, some specific issues were raised that the IASB has sought to address. The revised proposals respond to those issues by introducing enhancements to the presentation and measurement of insurance contracts while seeking to minimise artificial accounting volatility.
When the IASB began its work in 2001, there was no international standard on Insurance Contracts. In preparation for the adoption of IFRSs by a number of countries, including New Zealand, the IASB introduced an interim standard (IFRS 4 Insurance Contracts) until a more comprehensive review of the accounting for insurance contracts could be completed. The first phase of that comprehensive review began in 2007 with the publication of a Discussion Paper followed by an Exposure Draft that was published for public comment in 2010.
The revised Exposure Draft sets out in full the proposals for the accounting for Insurance Contracts. However, respondents are asked for comments on the key areas that the IASB has changed as a result of the responses it received to the 2010 Exposure Draft.
If adopted, the proposals in the revised Exposure Draft would replace New Zealand Equivalent to International Financial Reporting Standard 4 (NZ IFRS 4), including Appendices C and D.
Comments are due to the New Zealand Accounting Standards Board (NZASB) by 25 September 2013 and to the IASB by 25 October 2013.
Comments can be made to the NZASB addressed to the Chief Executive, External Reporting Board (XRB), PO Box 11250, Manners Street Central, Wellington 6142, or by email to firstname.lastname@example.org. Comments can also be made electronically via the IASB website (www.ifrs.org), using the ‘Comment on a proposal’ page located via the ‘Get Involved’ tab. The NZASB would appreciate copies of submissions made directly to the IASB.
It would be appreciated if respondents send their comments in electronic form (PDF and Microsoft Word formats) as it allows for efficient collation and analysis of comments. All comments will ultimately be posted on the XRB website unless respondents indicate that they wish their comments to remain confidential.