IFRSmap

This page is our road map to IFRS
- whatever you are looking for we aim to show you in the right direction.

List of IFRS / IAS Regulations for financial reporting

For (re)insurance companies the following are the most relevant

IAS 19

Applies to employee benefits.
This is discussed in a post here.

IAS 39

Covers financial instruments. Refer also to IFRS 9.
Please refer to this post.

IFRS 4

Applies to insurance contracts. Being replaced by IFRS 17.
More information here.

IFRS 17

Applies to insurance contracts. Planned to be in force at 1 January 2021.
More information here.

Example of Balance Sheet and Profit & Loss Statement

Balance sheet

This describes the company’s financial position at a specific date. That is, the valuation date.

In a simplified example it looks like this:

ASSETS
===============================

Intangible10
Investments100
Receivables5
Cash10
TOTAL ASSETS125

LIABILITIES & EQUITY
===============================

Share Capital50
Technical Provisions60
Payables5
Deferred Tax10
TOTAL EQUITY & LIABILITIES125

Income statement

This illustrates the companies financial performance over a certain period, usually a year.

 

PROFIT & LOSS
===============================

Premiums100
Reinsurance Premium-20
Investment Income10
Claims-20
Expenses-10
PROFIT BEFORE TAX60

Example of notes to the Financial Statements

Financial statements comes with notes which provides narratives and “all” the details to the numbers.

Example

Note 9 – Premiums
======================================

Life Premiums50
Non-Life Premiums50
TOTAL100

 

Technical Provisions under IFRS

Concepts & Methods

There are some universal methods. Please find more info here.

Life Reserving

LTBP

Non-Life Reserving

Outstanding Claims
IBNR

Unearned Premium Reserve

Premiums is the main source of income for an insurance company. Insurers differentiate between written premiums and earned premiums. The former is the premiums that are contracted and usually paid for. The latter refers to the part that is earned in term of the risk exposure.

Unexpired Risk Reserve

If the expected loss-ratio for this UPR is above 100% then a Unexpired Risk Reserve (URR) is needed. The reserved amount between the UPR and URR is often referred to as the AURR.

Liability Adequacy Test

The so called “LAT” is an assessment of whether the carrying amount of an insurance liability needs to be increased (or the carrying amount of related deferred acquisition costs or related intangible assets decreased), based on a review of future cash flows.

It is part of the IFRS 4 regulation and is required to be performed at least annually.

IFRS 17

The new standard IFRS 17 will change most of the above.

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