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Wednesday 15 July 2020

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Exposure Draft

Exposure Draft (December 2015)

Insurance Contracts: Exposure Draft & Comment letters (ED/2015/11)

On 9 December 2015, the International Accounting Standards Board (the Board) published for public comment proposals to amend the existing insurance contracts Standard, IFRS 4.  This is to address the temporary consequences of the different effective dates of IFRS 9 Financial Instruments and the new insurance contracts Standard.

Both IFRS 9 (which was issued in July 2014 and has an effective date of 1 January 2018) and the new Insurance Contracts Standard (which will replace IFRS 4 and have a later effective date) are relevant to companies that issue insurance contracts.  Some of those companies have expressed concerns about the need to implement two significant changes in accounting on different dates. They have also highlighted that potential increased accounting volatility could arise in profit or loss if the new requirements for financial instruments were to be applied before the new requirements for insurance contracts.

In order to balance meeting the needs of those stakeholders with the needs of users of financial statements, the Board has proposed the following amendments to IFRS 4. These proposals supplement existing options within IFRS 4 that could be used to address any accounting volatility that may arise: 

  • the overlay approach: an option for a company that issues insurance contracts to remove from profit or loss the incremental volatility in profit or loss caused by changes in the measurement of financial assets upon application of IFRS 9.  This approach would be in place until the new Insurance Contracts Standard comes into force; and
  • the deferral approach: an optional temporary exemption from applying IFRS 9 that would be available to companies whose predominant activity is to issue insurance contracts.  Such a deferral would be available until the new Insurance Contracts Standard comes into effect (but it could not be used after 1 January 2021).

Comment letters


The IASB is seeking comments on this Exposure Draft by 8 February 2016.

Please note: when submitting a comment letter or when communicating with the IFRS Foundation, the IASB or any of its constituent bodies, you acknowledge and accept the IFRS Foundation Privacy Policy, which details how we use and process your data.  

View the Comment Letters.



Due process documents
Exposure Draft: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts [PDF]
公開草案: IFRS第9号「金融商品」のIFRS第4号「保険契約」との適用IFRS第4号の修正案 [PDF] (Japanese)
Proyecto de Norma: Aplicación de la NIIF 9 Instrumentos Financieros con la NIIF 4 Contratos de Seguro (Modificaciones propuestas a la NIIF 4) [PDF] (Spanish)
Recepción de comentarios hasta el 8 de febrero de 2016
Exposé-sondage: Application d’IFRS 9 Instruments financiers et d’IFRS 4 Contrats d’assurance (projet de modification d’IFRS 4) [PDF] (French)
Date limite de réception des commentaires: 8 février 2016


Project contact

Andrea Pryde
Technical Principal

Yulia Feygina
Senior Technical Manager

Related Information

Press release: IASB proposes amendments to the current Insurance Contracts Standard to provide temporary reliefs for insurers