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Standard overhaul 20 years in the making
The International Accounting Standards Board has now issued its overhauled IFRS 17 Insurance Contracts.
It is hoped the first truly international standard for insurance contracts will help investors and other “better understand insurers’ risk exposure, profitability and financial position”.
IFRS 17 replaces IFRS 4, which was brought in as an interim standard in 2004. The new IFRS should solve the comparison problems by requiring all insurance contracts to be accounted for in a consistent manner. Insurance obligations will be accounted for using current values instead of historic costs. Information will need to be updated regularly, providing more useful information to users of financial statements.
IASB chairman Hans Hoogervorst commented: “IFRS 17 replaces the current myriad of accounting approaches with a single approach that will provide investors and others with comparable and updated information.”
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