New accounting standard – AASB 17 Insurance contracts
APRA is requesting feedback on its planned approach to integrating AASB 17 Insurance contracts into the capital and reporting frameworks applicable to life insurers and general insurers.
AASB 17 Insurance Contracts (AASB 17) establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts. The requirements are designed to help users of financial statements better understand an insurer’s exposure, profitability and financial position and will facilitate comparison across similar insurance companies. AASB 17 is the direct result of implementing the equivalent International Financial Reporting Standard (IFRS) 17 in Australia. AASB 17 is effective from 1 January 2023 and early adoption is permitted.
APRA’s prudential capital and reporting framework is based on the existing accounting treatment. The introduction of AASB 17 will both modify a number of accounting concepts which underpin APRA’s prudential framework and introduce some new concepts. Through stakeholder feedback, insurers have expressed a strong desire for early direction from APRA on how the capital and reporting frameworks are likely to change as a result of AASB 17.
Latest update – November 2020
On 25 November 2020, APRA released a discussion paper setting out its proposals on the integration of AASB 17 into the capital and accounting frameworks. The discussion paper also outlines a number of proposed updates to the LAGIC framework to ensure it remains fit for purpose.
Media release: APRA consults on implementation of AASB 17 for insurance capital and reporting
Note on submissions
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