Insurance Contracts
(a)
insurance contracts, including reinsurance contracts , it issues;
(b)
reinsurance contracts it holds; and
(c)
investment contracts with discretionary participation features it issues, provided the entity also issues insurance contracts.
(a)
reinsurance contracts held, except:
(i)
for references to insurance contracts issued; and
(ii)
as described in paragraphs 60-70A .
(b)
investment contracts with discretionary participation features as set out in paragraph 3(c), except for the reference to insurance contracts in paragraph 3(c) and as described in paragraph 71 .
(a)
warranties provided by a manufacturer, dealer or retailer in connection with the sale of its goods or services to a customer (see Ind AS 115, Revenue from Contracts with Customers ).
(b)
employers’ assets and liabilities from employee benefit plans (see Ind AS 19, Employee Benefits and Ind AS 102, Share-based Payment ) and retirement benefit obligations reported by defined benefit retirement plans.
(c)
contractual rights or contractual obligations contingent on the future use of, or the right to use, a non-financial item (for example, some licence fees, royalties, variable and other contingent lease payments and similar items: see Ind AS 115, Ind AS 38, Intangible Assets and Ind AS 116, Leases ).
(d)
residual value guarantees provided by a manufacturer, dealer or retailer and a lessee’s residual value guarantees when they are embedded in a lease (see Ind AS 115 and Ind AS 116).
(e)
financial guarantee contracts, unless the issuer has previously asserted explicitly that it regards such contracts as insurance contracts and has used accounting applicable to insurance contracts. The issuer shall choose to apply either Ind AS 117 or Ind AS 32, Financial Instruments: Presentation , Ind AS 107, Financial Instruments: Disclosures and Ind AS 109, Financial Instruments to such financial guarantee contracts. The issuer may make that choice contract by contract, but the choice for each contract is irrevocable.
(f)
contingent consideration payable or receivable in a business combination (see Ind AS 103, Business Combinations ).
(g)
insurance contracts in which the entity is the policyholder , unless those contracts are reinsurance contracts held (see paragraph 3(b)).
(h)
credit card contracts, or similar contracts that provide credit or payment arrangements, that meet the definition of an insurance contract if, and only if, the entity does not reflect an assessment of the insurance risk associated with an individual customer in setting the price of the contract with that customer (see Ind AS 109 and other applicable Ind AS). However, if, and only if, Ind AS 109 requires an entity to separate an insurance coverage component (see paragraph 2.1(e)(iv) of Ind AS 109 ) that is embedded in such a contract, the entity shall apply Ind AS 117 to that component.
(a)
the entity does not reflect an assessment of the risk associated with an individual customer in setting the price of the contract with that customer;
(b)
the contract compensates the customer by providing services, rather than by making cash payments to the customer; and
(c)
the insurance risk transferred by the contract arises primarily from the customer’s use of services rather than from uncertainty over the cost of those services.
(a)
apply Ind AS 109 to determine whether there is an embedded derivative to be separated and, if there is, how to account for that derivative.
(b)
separate from a host insurance contract an investment component if, and only if, that investment component is distinct (see paragraphs B31-B32 ). The entity shall apply Ind AS 109 to account for the separated investment component unless it is an investment contract with discretionary participation features within the scope of Ind AS 117 (see paragraph 3(c)).
(a)
apply Ind AS 115 to attribute the cash inflows between the insurance component and any promises to provide distinct goods or services other than insurance contract services; and
(b)
attribute the cash outflows between the insurance component and any promised goods or services other than insurance contract services, accounted for applying Ind AS 115 so that:
(i)
cash outflows that relate directly to each component are attributed to that component; and
(ii)
any remaining cash outflows are attributed on a systematic and rational basis, reflecting the cash outflows the entity would expect to arise if that component were a separate contract.
(a)
a group of contracts that are onerous at initial recognition, if any;
(b)
a group of contracts that at initial recognition have no significant possibility of becoming onerous subsequently, if any; and
(c)
a group of the remaining contracts in the portfolio, if any.
(a)
based on the likelihood of changes in assumptions which, if they occurred, would result in the contracts becoming onerous.
(b)
using information about estimates provided by the entity’s internal reporting. Hence, in assessing whether contracts that are not onerous at initial recognition have no significant possibility of becoming onerous:
(i)
an entity shall not disregard information provided by its internal reporting about the effect of changes in assumptions on different contracts on the possibility of their becoming onerous; but
(ii)
an entity is not required to gather additional information beyond that provided by the entity’s internal reporting about the effect of changes in assumptions on different contracts.
(a)
more groups that are not onerous at initial recognition—if the entity’s internal reporting provides information that distinguishes:
(i)
different levels of profitability; or
(ii)
different possibilities of contracts becoming onerous after initial recognition; and
(b)
more than one group of contracts that are onerous at initial recognition—if the entity’s internal reporting provides information at a more detailed level about the extent to which the contracts are onerous.
(a)
the beginning of the coverage period of the group of contracts;
(b)
the date when the first payment from a policyholder in the group becomes due; and
(c)
for a group of onerous contracts, when the group becomes onerous.
(a)
for groups of insurance contracts meeting either of the criteria specified in paragraph 53 , an entity may simplify the measurement of the group using the premium allocation approach in paragraphs 55-59 .
(b)
for groups of reinsurance contracts held, an entity shall apply paragraphs 32- 46 as required by paragraphs 63-70A . Paragraph 45 (on insurance contracts with direct participation features ) and paragraphs 47-52 (on onerous contracts) do not apply to groups of reinsurance contracts held.
(c)
for groups of investment contracts with discretionary participation features, an entity shall apply paragraphs 32-52 as modified by paragraph 71 .
(a)
the fulfilment cash flows, which comprise:
(i)
estimates of future cash flows (paragraphs 33-35);
(ii)
an adjustment to reflect the time value of money and the financial risks related to the future cash flows, to the extent that the financial risks are not included in the estimates of the future cash flows (paragraph 36); and
(iii)
a risk adjustment for non-financial risk (paragraph 37).
(b)
the contractual service margin, measured applying paragraphs 38-39.
(a)
incorporate, in an unbiased way, all reasonable and supportable information available without undue cost or effort about the amount, timing and uncertainty of those future cash flows (see paragraphs B37- B41 ). To do this, an entity shall estimate the expected value (ie the probability-weighted mean) of the full range of possible outcomes.
(b)
reflect the perspective of the entity, provided that the estimates of any relevant market variables are consistent with observable market prices for those variables (see paragraphs B42-B53 ).
(c)
be current—the estimates shall reflect conditions existing at the measurement date, including assumptions at that date about the future (see paragraphs B54-B60 ).
(d)
be explicit—the entity shall estimate the adjustment for non-financial risk separately from the other estimates (see paragraph B90). The entity also shall estimate the cash flows separately from the adjustment for the time value of money and financial risk, unless the most appropriate measurement technique combines these estimates (see paragraph B46 ).
(a)
the entity has the practical ability to reassess the risks of the particular policyholder and, as a result, can set a price or level of benefits that fully reflects those risks; or
(b)
both of the following criteria are satisfied:
(i)
the entity has the practical ability to reassess the risks of the portfolio of insurance contracts that contains the contract and, as a result, can set a price or level of benefits that fully reflects the risk of that portfolio; and
(ii)
the pricing of the premiums up to the date when the risks are reassessed does not take into account the risks that relate to periods after the reassessment date.
(a)
reflect the time value of money, the characteristics of the cash flows and the liquidity characteristics of the insurance contracts;
(b)
be consistent with observable current market prices (if any) for financial instruments with cash flows whose characteristics are consistent with those of the insurance contracts, in terms of, for example, timing, currency and liquidity; and
(c)
exclude the effect of factors that influence such observable market prices but do not affect the future cash flows of the insurance contracts.
(a)
the initial recognition of an amount for the fulfilment cash flows, measured by applying paragraphs 32-37;
(b)
any cash flows arising from the contracts in the group at that date;
(c)
the derecognition at the date of initial recognition of:
(i)
any asset for insurance acquisition cash flows applying paragraph 28C; and
(ii)
any other asset or liability previously recognised for cash flows related to the group of contracts as specified in paragraph B66A .
(a)
the liability for remaining coverage comprising:
(i)
the fulfilment cash flows related to future service allocated to the group at that date, measured applying paragraphs 33-37 and B36- B92;
(ii)
the contractual service margin of the group at that date, measured applying paragraphs 43-46; and
(b)
the liability for incurred claims , comprising the fulfilment cash flows related to past service allocated to the group at that date, measured applying paragraphs 33-37 and B36-B92.
(a)
insurance revenue—for the reduction in the liability for remaining coverage because of services provided in the period, measured applying paragraphs B120-B124 ;
(b)
insurance service expenses—for losses on groups of onerous contracts, and reversals of such losses (see paragraphs 47-52); and
(c)
insurance finance income or expenses—for the effect of the time value of money and the effect of financial risk as specified in paragraph 87.
(a)
insurance service expenses—for the increase in the liability because of claims and expenses incurred in the period, excluding any investment components;
(b)
insurance service expenses—for any subsequent changes in fulfilment cash flows relating to incurred claims and incurred expenses; and
(c)
insurance finance income or expenses—for the effect of the time value of money and the effect of financial risk as specified in paragraph 87 .
(a)
the effect of any new contracts added to the group (see paragraph 28);
(b)
interest accreted on the carrying amount of the contractual service margin during the reporting period, measured at the discount rates specified in paragraph B72(b) ;
(c)
the changes in fulfilment cash flows relating to future service as specified in paragraphs B96-B100 , except to the extent that:
(i)
such increases in the fulfilment cash flows exceed the carrying amount of the contractual service margin, giving rise to a loss (see paragraph 48(a)); or
(ii)
such decreases in the fulfilment cash flows are allocated to the loss component of the liability for remaining coverage applying paragraph 50(b).
(d)
the effect of any currency exchange differences on the contractual service margin; and
(e)
the amount recognised as insurance revenue because of the transfer of insurance contract services in the period, determined by the allocation of the contractual service margin remaining at the end of the reporting period (before any allocation) over the current and remaining coverage period applying paragraph B119 .
(a)
the effect of any new contracts added to the group (see paragraph 28 );
(b)
the change in the amount of the entity’s share of the fair value of the underlying items (see paragraph B104(b)(i) ), except to the extent that:
(i)
paragraph B115 (on risk mitigation) applies;
(ii)
the decrease in the amount of the entity’s share of the fair value of the underlying items exceeds the carrying amount of the contractual service margin, giving rise to a loss (see paragraph 48); or
(iii)
the increase in the amount of the entity’s share of the fair value of the underlying items reverses the amount in (ii).
(c)
the changes in fulfilment cash flows relating to future service, as specified in paragraphs B101-B118 , except to the extent that:
(i)
paragraph B115 (on risk mitigation) applies;
(ii)
such increases in the fulfilment cash flows exceed the carrying amount of the contractual service margin, giving rise to a loss (see paragraph 48); or
(iii)
such decreases in the fulfilment cash flows are allocated to the loss component of the liability for remaining coverage applying paragraph 50(b).
(d)
the effect of any currency exchange differences arising on the contractual service margin; and
(e)
the amount recognised as insurance revenue because of the transfer of insurance contract services in the period, determined by the allocation of the contractual service margin remaining at the end of the reporting period (before any allocation) over the current and remaining coverage period applying paragraph B119 .
(a)
unfavourable changes relating to future service in the fulfilment cash flows allocated to the group arising from changes in estimates of future cash flows and the risk adjustment for non-financial risk; and
(b)
for a group of insurance contracts with direct participation features, the decrease in the amount of the entity’s share of the fair value of the underlying items.
(a)
the subsequent changes in fulfilment cash flows of the liability for remaining coverage specified in paragraph 51 on a systematic basis between:
(i)
the loss component of the liability for remaining coverage; and
(ii)
the liability for remaining coverage, excluding the loss component.
(b)
solely to the loss component until that component is reduced to zero:
(i)
any subsequent decrease relating to future service in fulfilment cash flows allocated to the group arising from changes in estimates of future cash flows and the risk adjustment for non-financial risk; and
(ii)
any subsequent increases in the amount of the entity’s share of the fair value of the underlying items.
(a)
estimates of the present value of future cash flows for claims and expenses released from the liability for remaining coverage because of incurred insurance service expenses;
(b)
changes in the risk adjustment for non-financial risk recognised in profit or loss because of the release from risk; and
(c)
insurance finance income or expenses.
(a)
the entity reasonably expects that such simplification would produce a measurement of the liability for remaining coverage for the group that would not differ materially from the one that would be produced applying the requirements in paragraphs 32-52; or
(b)
the coverage period of each contract in the group (including insurance contract services arising from all premiums within the contract boundary determined at that date applying paragraph 34 ) is one year or less.
(a)
the extent of future cash flows relating to any derivatives embedded in the contracts; and
(b)
the length of the coverage period of the group of contracts.
(a)
on initial recognition, the carrying amount of the liability is:
(i)
the premiums, if any, received at initial recognition;
(ii)
minus any insurance acquisition cash flows at that date, unless the entity chooses to recognise the payments as an expense applying paragraph 59(a); and
(iii)
plus or minus any amount arising from the derecognition at that date of:
(b)
at the end of each subsequent reporting period, the carrying amount of the liability is the carrying amount at the start of the reporting period:
(i)
plus the premiums received in the period;
(ii)
minus insurance acquisition cash flows; unless the entity chooses to recognise the payments as an expense applying paragraph 59(a);
(iii)
plus any amounts relating to the amortisation of insurance acquisition cash flows recognised as an expense in the reporting period; unless the entity chooses to recognise insurance acquisition cash flows as an expense applying paragraph 59(a);
(iv)
plus any adjustment to a financing component, applying paragraph 56;
(v)
minus the amount recognised as insurance revenue for services provided in that period (see paragraph B126 ); and
(vi)
minus any investment component paid or transferred to the liability for incurred claims.
(a)
the carrying amount of the liability for remaining coverage determined applying paragraph 55; and
(b)
the fulfilment cash flows that relate to remaining coverage of the group, applying paragraphs 33-37 and B36-B92. However, if, in applying paragraph 59(b), the entity does not adjust the liability for incurred claims for the time value of money and the effect of financial risk, it shall not include in the fulfilment cash flows any such adjustment.
(a)
may choose to recognise any insurance acquisition cash flows as expenses when it incurs those costs, provided that the coverage period of each contract in the group at initial recognition is no more than one year.
(b)
shall measure the liability for incurred claims for the group of insurance contracts at the fulfilment cash flows relating to incurred claims, applying paragraphs 33-37 and B36-B92. However, the entity is not required to adjust future cash flows for the time value of money and the effect of financial risk if those cash flows are expected to be paid or received in one year or less from the date the claims are incurred.
(a)
the beginning of the coverage period of the group of reinsurance contracts held; and
(b)
the date the entity recognises an onerous group of underlying insurance contracts applying paragraph 25(c), if the entity entered into the related reinsurance contract held in the group of reinsurance contracts held at or before that date.
(a)
the fulfilment cash flows;
(b)
the amount derecognised at that date of any asset or liability previously recognised for cash flows related to the group of reinsurance contracts held;
(c)
any cash flows arising at that date; and
(d)
any income recognised in profit or loss applying paragraph 66A.
(a)
the effect of any new contracts added to the group (see paragraph 28 );
(b)
interest accreted on the carrying amount of the contractual service margin, measured at the discount rates specified in paragraph B72(b) ;
(ba)
income recognised in profit or loss in the reporting period applying paragraph 66A;
(bb)
reversals of a loss-recovery component recognised applying paragraph 66B (see paragraph B119F) to the extent those reversals are not changes in the fulfilment cash flows of the group of reinsurance contracts held;
(c)
changes in the fulfilment cash flows, measured at the discount rates specified in paragraph B72(c), to the extent that the change relates to future service, unless:
(i)
the change results from a change in fulfilment cash flows allocated to a group of underlying insurance contracts that does not adjust the contractual service margin for the group of underlying insurance contracts; or
(ii)
the change results from applying paragraphs 57-58 (on onerous contracts), if the entity measures a group of underlying insurance contracts applying the premium allocation approach.
(d)
the effect of any currency exchange differences arising on the contractual service margin; and
(e)
the amount recognised in profit or loss because of services received in the period, determined by the allocation of the contractual service margin remaining at the end of the reporting period (before any allocation) over the current and remaining coverage period of the group of reinsurance contracts held, applying paragraph B119 .
(a)
the entity reasonably expects the resulting measurement would not differ materially from the result of applying the requirements in paragraphs 63-68; or
(b)
the coverage period of each contract in the group of reinsurance contracts held (including insurance coverage from all premiums within the contract boundary determined at that date applying paragraph 34 ) is one year or less.
(a)
the extent of future cash flows relating to any derivatives embedded in the contracts; and
(b)
the length of the coverage period of the group of reinsurance contracts held.
(a)
the date of initial recognition (see paragraphs 25 and 28 ) is the date the entity becomes party to the contract.
(b)
the contract boundary (see paragraph 34 ) is modified so that cash flows are within the contract boundary if they result from a substantive obligation of the entity to deliver cash at a present or future date. The entity has no substantive obligation to deliver cash if it has the practical ability to set a price for the promise to deliver the cash that fully reflects the amount of cash promised and related risks.
(c)
the allocation of the contractual service margin (see paragraphs 44(e) and 45(e) ) is modified so that the entity shall recognise the contractual service margin over the duration of the group of contracts in a systematic way that reflects the transfer of investment services under the contract.
(a)
if the modified terms had been included at contract inception:
(i)
the modified contract would have been excluded from the scope of Ind AS 117, applying paragraphs 3-8A ;
(ii)
an entity would have separated different components from the host insurance contract applying paragraphs 10-13 , resulting in a different insurance contract to which Ind AS 117 would have applied;
(iii)
the modified contract would have had a substantially different contract boundary applying paragraph 34 ; or
(iv)
the modified contract would have been included in a different group of contracts applying paragraphs 14-24 .
(b)
the original contract met the definition of an insurance contract with direct participation features , but the modified contract no longer meets that definition, or vice versa; or
(c)
the entity applied the premium allocation approach in paragraphs 53-59 or paragraphs 69-70 to the original contract, but the modifications mean that the contract no longer meets the eligibility criteria for that approach in paragraph 53 or paragraph 69.
(a)
it is extinguished, ie when the obligation specified in the insurance contract expires or is discharged or cancelled; or
(b)
any of the conditions in paragraph 72 are met.
(a)
the fulfilment cash flows allocated to the group are adjusted to eliminate the present value of the future cash flows and risk adjustment for non-financial risk relating to the rights and obligations that have been derecognised from the group, applying paragraphs 40(a)(i) and 40(b) ;
(b)
the contractual service margin of the group is adjusted for the change in fulfilment cash flows described in (a), to the extent required by paragraphs 44(c) and 45(c), unless paragraph 77 applies; and
(c)
the number of coverage units for expected remaining insurance contract services is adjusted to reflect the coverage units derecognised from the group, and the amount of the contractual service margin recognised in profit or loss in the period is based on that adjusted number, applying paragraph B119 .
(a)
adjust the contractual service margin of the group from which the contract has been derecognised, to the extent required by paragraphs 44(c) and 45(c) , for the difference between (i) and either (ii) for contracts transferred to a third party or (iii) for contracts derecognised applying paragraph 72:
(i)
the change in the carrying amount of the group of insurance contracts resulting from the derecognition of the contract, applying paragraph 76(a).
(ii)
the premium charged by the third party.
(iii)
the premium the entity would have charged had it entered into a contract with equivalent terms as the new contract at the date of the contract modification, less any additional premium charged for the modification.
(b)
measure the new contract recognised applying paragraph 72 assuming that the entity received the premium described in (a)(iii) at the date of the modification.
(a)
insurance contracts issued that are assets;
(b)
insurance contracts issued that are liabilities;
(c)
reinsurance contracts held that are assets; and
(d)
reinsurance contracts held that are liabilities.
(a)
an insurance service result (paragraphs 83-86), comprising insurance revenue and insurance service expenses; and
(b)
insurance finance income or expenses ( paragraphs 87-92 ).
(a)
treat reinsurance cash flows that are contingent on claims on the underlying contracts as part of the claims that are expected to be reimbursed under the reinsurance contract held;
(b)
treat amounts from the reinsurer that it expects to receive that are not contingent on claims of the underlying contracts (for example, some types of ceding commissions) as a reduction in the premiums to be paid to the reinsurer;
(ba)
treat amounts recognised relating to recovery of losses applying paragraphs 66(c)(i)-(ii) and 66A-66B as amounts recovered from the reinsurer; and
(c)
not present the allocation of premiums paid as a reduction in revenue.
(a)
the effect of the time value of money and changes in the time value of money; and
(b)
the effect of financial risk and changes in financial risk; but
(c)
excluding any such changes for groups of insurance contracts with direct participation features that would adjust the contractual service margin but do not do so when applying paragraphs 45(b)(ii), 45(b)(iii), 45(c)(ii) or 45(c)(iii) . These are included in insurance service expenses.
(a)
paragraph B117A to insurance finance income or expenses arising from the application of paragraph B115 (risk mitigation); and
(b)
paragraphs 88 and 89 to all other insurance finance income or expenses.
(a)
including insurance finance income or expenses for the period in profit or loss; or
(b)
disaggregating insurance finance income or expenses for the period to include in profit or loss an amount determined by a systematic allocation of the expected total insurance finance income or expenses over the duration of the group of contracts, applying paragraphs B130-B133 .
(a)
including insurance finance income or expenses for the period in profit or loss; or
(b)
disaggregating insurance finance income or expenses for the period to include in profit or loss an amount that eliminates accounting mismatches with income or expenses included in profit or loss on the underlying items held, applying paragraphs B134-B136 .
(a)
it shall reclassify to profit or loss as a reclassification adjustment (see Ind AS 1, Presentation of Financial Statements ) any remaining amounts for the group (or contract) that were previously recognised in other comprehensive income because the entity chose the accounting policy set out in paragraph 88(b).
(b)
it shall not reclassify to profit or loss as a reclassification adjustment (see Ind AS 1) any remaining amounts for the group (or contract) that were previously recognised in other comprehensive income because the entity chose the accounting policy set out in paragraph 89(b).
(a)
the amounts recognised in its financial statements for contracts within the scope of Ind AS 117 ( see paragraphs 97-116 );
(b)
the significant judgements, and changes in those judgements, made when applying Ind AS 117 ( see paragraphs 117-120 ); and
(c)
the nature and extent of the risks from contracts within the scope of Ind AS 117 (see paragraphs 121-132 ).
(a)
type of contract (for example, major product lines);
(b)
geographical area (for example, country or region); or
(c)
reportable segment, as defined in Ind AS 108, Operating Segments .
(a)
which of the criteria in paragraphs 53 and 69 it has satisfied;
(b)
whether it makes an adjustment for the time value of money and the effect of financial risk applying paragraphs 56 and 57(b) ; and
(c)
the method it has chosen to recognise insurance acquisition cash flows applying paragraph 59(a) .
(a)
disclose, in a table, the reconciliations set out in paragraphs 100-105B; and
(b)
for each reconciliation, present the net carrying amounts at the beginning and at the end of the period, disaggregated into a total for portfolios of contracts that are assets and a total for portfolios of contracts that are liabilities, that equal the amounts presented in the balance sheet applying paragraph 78 .
(a)
the net liabilities (or assets) for the remaining coverage component, excluding any loss component.
(b)
any loss component (see paragraphs 47-52 and 57-58 ).
(c)
the liabilities for incurred claims. For insurance contracts to which the premium allocation approach described in paragraphs 53-59 or 69-70A has been applied, an entity shall disclose separate reconciliations for:
(i)
the estimates of the present value of the future cash flows; and
(ii)
the risk adjustment for non-financial risk.
(a)
the estimates of the present value of the future cash flows;
(b)
the risk adjustment for non-financial risk; and
(c)
the contractual service margin.
(a)
insurance revenue.
(b)
insurance service expenses, showing separately:
(i)
incurred claims (excluding investment components) and other incurred insurance service expenses;
(ii)
amortisation of insurance acquisition cash flows;
(iii)
changes that relate to past service, ie changes in fulfilment cash flows relating to the liability for incurred claims; and
(iv)
changes that relate to future service, ie losses on onerous groups of contracts and reversals of such losses.
(c)
investment components excluded from insurance revenue and insurance service expenses (combined with refunds of premiums unless refunds of premiums are presented as part of the cash flows in the period described in paragraph 105(a)(i)).
(a)
changes that relate to future service, applying paragraphs B96-B118 , showing separately:
(i)
changes in estimates that adjust the contractual service margin;
(ii)
changes in estimates that do not adjust the contractual service margin, ie losses on groups of onerous contracts and reversals of such losses; and
(iii)
the effects of contracts initially recognised in the period.
(b)
changes that relate to current service, ie:
(i)
the amount of the contractual service margin recognised in profit or loss to reflect the transfer of services;
(ii)
the change in the risk adjustment for non-financial risk that does not relate to future service or past service; and
(iii)
experience adjustments (see paragraphs B97(c) and B113(a) ), excluding amounts relating to the risk adjustment for non-financial risk included in (ii).
(c)
changes that relate to past service, ie changes in fulfilment cash flows relating to incurred claims (see paragraphs B97(b) and B113(a)).
(a)
cash flows in the period, including:
(i)
premiums received for insurance contracts issued (or paid for reinsurance contracts held);
(ii)
insurance acquisition cash flows; and
(iii)
incurred claims paid and other insurance service expenses paid for insurance contracts issued (or recovered under reinsurance contracts held), excluding insurance acquisition cash flows.
(b)
the effect of changes in the risk of non-performance by the issuer of reinsurance contracts held;
(c)
insurance finance income or expenses; and
(d)
any additional line items that may be necessary to understand the change in the net carrying amount of the insurance contracts.
(a)
the amounts relating to the changes in the liability for remaining coverage as specified in paragraph B124 , separately disclosing:
(i)
the insurance service expenses incurred during the period as specified in paragraph B124(a);
(ii)
the change in the risk adjustment for non-financial risk, as specified in paragraph B124(b);
(iii)
the amount of the contractual service margin recognised in profit or loss because of the transfer of insurance contract services in the period, as specified in paragraph B124(c); and
(iv)
other amounts, if any, for example, experience adjustments for premium receipts other than those that relate to future service as specified in paragraph B124(d).
(b)
the allocation of the portion of the premiums that relate to the recovery of insurance acquisition cash flows (see paragraph B125 ).
(a)
the estimates of the present value of future cash outflows, showing separately the amount of the insurance acquisition cash flows;
(b)
the estimates of the present value of future cash inflows;
(c)
the risk adjustment for non-financial risk; and
(d)
the contractual service margin.
(a)
contracts acquired from other entities in transfers of insurance contracts or business combinations; and
(b)
groups of contracts that are onerous.
(a)
the reason why the entity was required to change the basis of disaggregation;
(b)
the amount of any adjustment for each financial statement line item affected; and
(c)
the carrying amount of the group of insurance contracts to which the change applied at the date of the change.
(a)
insurance contracts that existed at the transition date to which the entity has applied the modified retrospective approach;
(b)
insurance contracts that existed at the transition date to which the entity has applied the fair value approach; and
(c)
all other insurance contracts.
(a)
the methods used to measure insurance contracts within the scope of Ind AS 117 and the processes for estimating the inputs to those methods. Unless impracticable, an entity shall also provide quantitative information about those inputs.
(b)
any changes in the methods and processes for estimating inputs used to measure contracts, the reason for each change, and the type of contracts affected.
(c)
to the extent not covered in (a), the approach used:
(i)
to distinguish changes in estimates of future cash flows arising from the exercise of discretion from other changes in estimates of future cash flows for contracts without direct participation features (see paragraph B98 );
(ii)
to determine the risk adjustment for non-financial risk, including whether changes in the risk adjustment for non-financial risk are disaggregated into an insurance service component and an insurance finance component or are presented in full in the insurance service result;
(iii)
to determine discount rates;
(iv)
to determine investment components; and
(v)
to determine the relative weighting of the benefits provided by insurance coverage and investment-return service or by insurance coverage and investment-related service (see paragraphs B119-B119B ).
(a)
the exposures to risks and how they arise;
(b)
the entity’s objectives, policies and processes for managing the risks and the methods used to measure the risks; and
(c)
any changes in (a) or (b) from the previous period.
(a)
summary quantitative information about its exposure to that risk at the end of the reporting period. This disclosure shall be based on the information provided internally to the entity’s key management personnel.
(b)
the disclosures required by paragraphs 127-132, to the extent not provided applying (a) of this paragraph.
(a)
a sensitivity analysis that shows how profit or loss and equity would have been affected by changes in risk variables that were reasonably possible at the end of the reporting period:
(i)
for insurance risk—showing the effect for insurance contracts issued, before and after risk mitigation by reinsurance contracts held; and
(ii)
for each type of market risk—in a way that explains the relationship between the sensitivities to changes in risk variables arising from insurance contracts and those arising from financial assets held by the entity.
(b)
the methods and assumptions used in preparing the sensitivity analysis; and
(c)
changes from the previous period in the methods and assumptions used in preparing the sensitivity analysis, and the reasons for such changes.
(a)
an explanation of the method used in preparing such a sensitivity analysis and of the main parameters and assumptions underlying the information provided; and
(b)
an explanation of the objective of the method used and of any limitations that may result in the information provided.
(a)
the amount that best represents its maximum exposure to credit risk at the end of the reporting period, separately for insurance contracts issued and reinsurance contracts held; and
(b)
information about the credit quality of reinsurance contracts held that are assets.
(a)
a description of how it manages the liquidity risk.
(b)
separate maturity analyses for portfolios of insurance contracts issued that are liabilities and portfolios of reinsurance contracts held that are liabilities that show, as a minimum, net cash flows of the portfolios for each of the first five years after the reporting date and in aggregate beyond the first five years. An entity is not required to include in these analyses liabilities for remaining coverage measured applying paragraphs 55-59 and paragraphs 69-70A . The analyses may take the form of:
(i)
an analysis, by estimated timing, of the remaining contractual undiscounted net cash flows; or
(ii)
an analysis, by estimated timing, of the estimates of the present value of the future cash flows.
(c)
the amounts that are payable on demand, explaining the relationship between such amounts and the carrying amount of the related portfolios of contracts, if not disclosed applying (b) of this paragraph.
(a)
for premium receipts (and any related cash flows such as insurance acquisition cash flows and insurance premium taxes)—the estimate at the beginning of the period of the amounts expected in the period and the actual cash flows in the period; or
(b)
for insurance service expenses (excluding insurance acquisition expenses)—the estimate at the beginning of the period of the amounts expected to be incurred in the period and the actual amounts incurred in the period.
(a)
are onerous, if any;
(b)
have no significant possibility of becoming onerous subsequently, if any; or
(c)
do not fall into either (a) or (b), if any.
(a)
coverage for an insured event (insurance coverage);
(b)
for insurance contracts without direct participation features, the generation of an investment return for the policyholder, if applicable (investment-return service); and
(c)
for insurance contracts with direct participation features, the management of underlying items on behalf of the policyholder (investment-related service).
(a)
the contractual terms specify that the policyholder participates in a share of a clearly identified pool of underlying items;
(b)
the entity expects to pay to the policyholder an amount equal to a substantial share of the fair value returns on the underlying items; and
(c)
the entity expects a substantial proportion of any change in the amounts to be paid to the policyholder to vary with the change in fair value of the underlying items.
(a)
that are expected to be a significant portion of the total contractual benefits;
(b)
the timing or amount of which are contractually at the discretion of the issuer; and
(c)
that are contractually based on:
(i)
the returns on a specified pool of contracts or a specified type of contract;
(ii)
realised and/or unrealised investment returns on a specified pool of assets held by the issuer; or
(iii)
the profit or loss of the entity or fund that issues the contract.
(a)
investigate and pay valid claims for insured events that have already occurred, including events that have occurred but for which claims have not been reported, and other incurred insurance expenses; and
(b)
pay amounts that are not included in (a) and that relate to:
(i)
insurance contract services that have already been provided; or
(ii)
any investment components or other amounts that are not related to the provision of insurance contract services and that are not in the liability for remaining coverage.
(a)
investigate and pay valid claims under existing insurance contracts for insured events that have not yet occurred (i.e., the obligation that relates to the unexpired portion of the insurance coverage); and
(b)
pay amounts under existing insurance contracts that are not included in (a) and that relate to:
(i)
insurance contract services not yet provided (i.e., the obligations that relate to future provision of insurance contract services); or
(ii)
any investment components or other amounts that are not related to the provision of insurance contract services and that have not been transferred to the liability for incurred claims.
(a)
definition of an insurance contract (see paragraphs B2-B30);
(b)
separation of components from an insurance contract (see paragraphs B31- B35 );
(ba)
asset for insurance acquisition cash flows (see paragraphs B35A-B35D );
(c)
measurement (see paragraphs B36-B119F );
(d)
insurance revenue (see paragraphs B120-B127 );
(e)
insurance finance income or expenses (see paragraphs B128-B136 ); and
(f)
interim financial statements (see paragraph B137 ).
(a)
uncertain future event (see paragraphs B3-B5);
(b)
payments in kind (see paragraph B6);
(c)
the distinction between insurance risk and other risks (see paragraphs B7- B16);
(d)
significant insurance risk (see paragraphs B17-B23 );
(e)
changes in the level of insurance risk (see paragraphs B24-B25 ); and
(f)
examples of insurance contracts (see paragraphs B26-B30 ).
(a)
the probability of an insured event occurring;
(b)
when the insured event will occur; or
(c)
how much the entity will need to pay if the insured event occurs.
(a)
the loss of the ability to charge the policyholder for future service. For example, in an investment-linked life insurance contract, the death of the policyholder means that the entity can no longer perform investment management services and collect a fee for doing so. However, this economic loss for the entity does not result from insurance risk, just as a mutual fund manager does not take on insurance risk in relation to the possible death of a client. Consequently, the potential loss of future investment management fees is not relevant when assessing how much insurance risk is transferred by a contract.
(b)
a waiver, on death, of charges that would be made on cancellation or surrender. Because the contract brought those charges into existence, their waiver does not compensate the policyholder for a pre-existing risk. Consequently, they are not relevant when assessing how much insurance risk is transferred by a contract.
(c)
a payment conditional on an event that does not cause a significant loss to the holder of the contract. For example, consider a contract that requires the issuer to pay CU 1 million if an asset suffers physical damage that causes an insignificant economic loss of CU1 to the holder. In this contract, the holder transfers the insignificant risk of losing CU1 to the issuer. At the same time, the contract creates a non-insurance risk that the issuer will need to pay CU999,999 if the specified event occurs. Because there is no scenario in which an insured event causes a significant loss to the holder of the contract, the issuer does not accept significant insurance risk from the holder and this contract is not an insurance contract.
(d)
possible reinsurance recoveries. The entity accounts for these separately.
(a)
insurance against theft or damage.
(b)
insurance against product liability, professional liability, civil liability or legal expenses.
(c)
life insurance and prepaid funeral plans (although death is certain, it is uncertain when death will occur or, for some types of life insurance, whether death will occur within the period covered by the insurance).
(d)
life-contingent annuities and pensions, ie contracts that provide compensation for the uncertain future event—the survival of the annuitant or pensioner—to provide the annuitant or pensioner with a level of income that would otherwise be adversely affected by his or her survival. (Employers’ liabilities that arise from employee benefit plans and retirement benefit obligations reported by defined benefit retirement plans are outside the scope of Ind AS 117, applying paragraph 7(b) ).
(e)
insurance against disability and medical costs.
(f)
surety bonds, fidelity bonds, performance bonds and bid bonds, ie contracts that compensate the holder if another party fails to perform a contractual obligation; for example, an obligation to construct a building.
(g)
product warranties. Product warranties issued by another party for goods sold by a manufacturer, dealer or retailer are within the scope of Ind AS 117. However, product warranties issued directly by a manufacturer, dealer or retailer are outside the scope of Ind AS 117 applying paragraph 7(a) , and are instead within the scope of Ind AS 115 or Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets .
(h)
title insurance (insurance against the discovery of defects in the title to land or buildings that were not apparent when the insurance contract was issued). In this case, the insured event is the discovery of a defect in the title, not the defect itself.
(i)
travel insurance (compensation in cash or in kind to policyholders for losses suffered in advance of, or during, travel).
(j)
catastrophe bonds that provide for reduced payments of principal, interest or both, if a specified event adversely affects the issuer of the bond (unless the specified event does not create significant insurance risk; for example, if the event is a change in an interest rate or a foreign exchange rate).
(k)
insurance swaps and other contracts that require a payment depending on changes in climatic, geological or other physical variables that are specific to a party to the contract.
(a)
investment contracts that have the legal form of an insurance contract but do not transfer significant insurance risk to the issuer. For example, life insurance contracts in which the entity bears no significant mortality or morbidity risk are not insurance contracts; such contracts are financial instruments or service contracts—see paragraph B28. Investment contracts with discretionary participation features do not meet the definition of an insurance contract; however, they are within the scope of Ind AS 117 provided they are issued by an entity that also issues insurance contracts, applying paragraph 3(c).
(b)
contracts that have the legal form of insurance, but return all significant insurance risk to the policyholder through non-cancellable and enforceable mechanisms that adjust future payments by the policyholder to the issuer as a direct result of insured losses. For example, some financial reinsurance contracts or some group contracts return all significant insurance risk to the policyholders; such contracts are normally financial instruments or service contracts (see paragraph B28).
(c)
self-insurance (ie retaining a risk that could have been covered by insurance). In such situations, there is no insurance contract because there is no agreement with another party. Thus, if an entity issues an insurance contract to its parent, subsidiary or fellow subsidiary, there is no insurance contract in the consolidated financial statements because there is no contract with another party. However, for the individual or separate financial statements of the issuer or holder, there is an insurance contract.
(d)
contracts (such as gambling contracts) that require a payment if a specified uncertain future event occurs, but do not require, as a contractual precondition for payment, the event to adversely affect the policyholder. However, this does not exclude from the definition of an insurance contract contracts that specify a predetermined payout to quantify the loss caused by a specified event such as a death or an accident (see paragraph B12 ).
(e)
derivatives that expose a party to financial risk but not insurance risk, because the derivatives require that party to make (or give them the right to receive) payment solely based on the changes in one or more of a specified interest rate, a financial instrument price, a commodity price, a foreign exchange rate, an index of prices or rates, a credit rating or a credit index or any other variable, provided that, in the case of a non-financial variable, the variable is not specific to a party to the contract.
(f)
credit-related guarantees that require payments even if the holder has not incurred a loss on the failure of the debtor to make payments when due; such contracts are accounted for applying Ind AS 109, Financial Instruments (see paragraph B29).
(g)
contracts that require a payment that depends on a climatic, geological or any other physical variable not specific to a party to the contract (commonly described as weather derivatives).
(h)
contracts that provide for reduced payments of principal, interest or both, that depend on a climatic, geological or any other physical variable, the effect of which is not specific to a party to the contract (commonly referred to as catastrophe bonds).
(a)
regardless of whether the counterparty holds the underlying debt instrument; or
(b)
on a change in the credit rating or the credit index, rather than on the failure of a specified debtor to make payments when due.
(a)
the investment component and the insurance component are not highly interrelated.
(b)
a contract with equivalent terms is sold, or could be sold, separately in the same market or the same jurisdiction, either by entities that issue insurance contracts or by other parties. The entity shall take into account all information reasonably available in making this determination. The entity is not required to undertake an exhaustive search to identify whether an investment component is sold separately.
(a)
the entity is unable to measure one component without considering the other. Thus, if the value of one component varies according to the value of the other, an entity shall apply Ind AS 117 to account for the combined investment and insurance component; or
(b)
the policyholder is unable to benefit from one component unless the other is also present. Thus, if the lapse or maturity of one component in a contract causes the lapse or maturity of the other, the entity shall apply Ind AS 117 to account for the combined investment component and insurance component.
(a)
the cash flows and risks associated with the good or service are highly interrelated with the cash flows and risks associated with the insurance components in the contract; and
(b)
the entity provides a significant service in integrating the good or service with the insurance components.
(a)
insurance acquisition cash flows directly attributable to a group of insurance contracts:
(i)
to that group; and
(ii)
to groups that will include insurance contracts that are expected to arise from renewals of the insurance contracts in that group.
(b)
insurance acquisition cash flows directly attributable to a portfolio of insurance contracts, other than those in (a), to groups of contracts in the portfolio.
(a)
an entity shall recognise an impairment loss in profit or loss and reduce the carrying amount of an asset for insurance acquisition cash flows so that the carrying amount of the asset does not exceed the expected net cash inflow for the related group of insurance contracts, determined applying paragraph 32(a) .
(b)
when an entity allocates insurance acquisition cash flows to groups of insurance contracts applying paragraph B35A(a)(ii), the entity shall recognise an impairment loss in profit or loss and reduce the carrying amount of the related assets for insurance acquisition cash flows to the extent that:
(i)
the entity expects those insurance acquisition cash flows to exceed the net cash inflow for the expected renewals, determined applying paragraph 32(a) ; and
(ii)
the excess determined applying (b)(i) has not already been recognised as an impairment loss applying (a).
(a)
unbiased use of all reasonable and supportable information available without undue cost or effort (see paragraphs B37-B41);
(b)
market variables and non-market variables (see paragraphs B42-B53 );
(c)
using current estimates (see paragraphs B54-B60 ); and
(d)
cash flows within the contract boundary (see paragraphs B61-B71 ).
(a)
information about claims already reported by policyholders.
(b)
other information about the known or estimated characteristics of the insurance contracts.
(c)
historical data about the entity’s own experience, supplemented when necessary with historical data from other sources. Historical data is adjusted to reflect current conditions, for example, if:
(i)
the characteristics of the insured population differ (or will differ, for example, because of adverse selection) from those of the population that has been used as a basis for the historical data;
(ii)
there are indications that historical trends will not continue, that new trends will emerge or that economic, demographic and other changes may affect the cash flows that arise from the existing insurance contracts; or
(iii)
there have been changes in items such as underwriting procedures and claims management procedures that may affect the relevance of historical data to the insurance contracts.
(d)
current price information, if available, for reinsurance contracts and other financial instruments (if any) covering similar risks, such as catastrophe bonds and weather derivatives, and recent market prices for transfers of insurance contracts. This information shall be adjusted to reflect the differences between the cash flows that arise from those reinsurance contracts or other financial instruments, and the cash flows that would arise as the entity fulfils the underlying contracts with the policyholder.
(a)
market variables—variables that can be observed in, or derived directly from, markets (for example, prices of publicly traded securities and interest rates); and
(b)
non-market variables—all other variables (for example, the frequency and severity of insurance claims and mortality).
(a)
internal mortality statistics may be more persuasive than national mortality data if national data is derived from a large population that is not representative of the insured population. This might be because, for example, the demographic characteristics of the insured population could significantly differ from those of the national population, meaning that an entity would need to place more weight on the internal data and less weight on the national statistics.
(b)
conversely, if the internal statistics are derived from a small population with characteristics that are believed to be close to those of the national population, and the national statistics are current, an entity shall place more weight on the national statistics.
(a)
the updated estimates faithfully represent the conditions at the end of the reporting period.
(b)
the changes in estimates faithfully represent the changes in conditions during the period. For example, suppose that estimates were at one end of a reasonable range at the beginning of the period. If the conditions have not changed, shifting the estimates to the other end of the range at the end of the period would not faithfully represent what has happened during the period.
(a)
lasting changes in mortality;
(b)
changes in the characteristics of the insured population (for example, changes in underwriting or distribution, or selective lapses by policyholders in unusually good health);
(c)
random fluctuations; or
(d)
identifiable non-recurring causes.
(a)
surrender their contracts, if there is some probability that some of the policyholders will not; or
(b)
continue their contracts, if there is some probability that some of the policyholders will not.
(a)
premiums (including premium adjustments and instalment premiums) from a policyholder and any additional cash flows that result from those premiums.
(b)
payments to (or on behalf of) a policyholder, including claims that have already been reported but have not yet been paid (ie reported claims), incurred claims for events that have occurred but for which claims have not been reported and all future claims for which the entity has a substantive obligation (see paragraph 34).
(c)
payments to (or on behalf of) a policyholder that vary depending on returns on underlying items.
(d)
payments to (or on behalf of) a policyholder resulting from derivatives, for example, options and guarantees embedded in the contract, to the extent that those options and guarantees are not separated from the insurance contract (see paragraph 11(a) ).
(e)
an allocation of insurance acquisition cash flows attributable to the portfolio to which the contract belongs.
(f)
claim handling costs (ie the costs the entity will incur in investigating, processing and resolving claims under existing insurance contracts, including legal and loss-adjusters’ fees and internal costs of investigating claims and processing claim payments).
(g)
costs the entity will incur in providing contractual benefits paid in kind.
(h)
policy administration and maintenance costs, such as costs of premium billing and handling policy changes (for example, conversions and reinstatements). Such costs also include recurring commissions that are expected to be paid to intermediaries if a particular policyholder continues to pay the premiums within the boundary of the insurance contract.
(i)
transaction-based taxes (such as premium taxes, value added taxes and goods and services taxes) and levies (such as fire service levies and guarantee fund assessments) that arise directly from existing insurance contracts, or that can be attributed to them on a reasonable and consistent basis.
(j)
payments by the insurer in a fiduciary capacity to meet tax obligations incurred by the policyholder, and related receipts.
(k)
potential cash inflows from recoveries (such as salvage and subrogation) on future claims covered by existing insurance contracts and, to the extent that they do not qualify for recognition as separate assets, potential cash inflows from recoveries on past claims.
(ka)
costs the entity will incur:
(i)
performing investment activity, to the extent the entity performs that activity to enhance benefits from insurance coverage for policyholders. Investment activities enhance benefits from insurance coverage if the entity performs those activities expecting to generate an investment return from which policyholders will benefit if an insured event occurs.
(ii)
providing investment-return service to policyholders of insurance contracts without direct participation features (see paragraph B119B ).
(iii)
providing investment-related service to policyholders of insurance contracts with direct participation features.
(l)
an allocation of fixed and variable overheads (such as the costs of accounting, human resources, information technology and support, building depreciation, rent, and maintenance and utilities) directly attributable to fulfilling insurance contracts. Such overheads are allocated to groups of contracts using methods that are systematic and rational, and are consistently applied to all costs that have similar characteristics.
(m)
any other costs specifically chargeable to the policyholder under the terms of the contract.
(a)
investment returns. Investments are recognised, measured and presented separately.
(b)
cash flows (payments or receipts) that arise under reinsurance contracts held. Reinsurance contracts held are recognised, measured and presented separately.
(c)
cash flows that may arise from future insurance contracts, ie cash flows outside the boundary of existing contracts (see paragraphs 34-35 ).
(d)
cash flows relating to costs that cannot be directly attributed to the portfolio of insurance contracts that contain the contract, such as some product development and training costs. Such costs are recognised in profit or loss when incurred.
(e)
cash flows that arise from abnormal amounts of wasted labour or other resources that are used to fulfil the contract. Such costs are recognised in profit or loss when incurred.
(f)
income tax payments and receipts the insurer does not pay or receive in a fiduciary capacity or that are not specifically chargeable to the policyholder under the terms of the contract.
(g)
cash flows between different components of the reporting entity, such as policyholder funds and shareholder funds, if those cash flows do not change the amount that will be paid to the policyholders.
(h)
cash flows arising from components separated from the insurance contract and accounted for using other applicable Standards (see paragraphs 10-13 ).
(a)
the policyholder to share with policyholders of other contracts the returns on the same specified pool of underlying items; and
(b)
either:
(i)
the policyholder to bear a reduction in their share of the returns on the underlying items because of payments to policyholders of other contracts that share in that pool, including payments arising under guarantees made to policyholders of those other contracts; or
(ii)
policyholders of other contracts to bear a reduction in their share of returns on the underlying items because of payments to the policyholder, including payments arising from guarantees made to the policyholder.
(a)
include payments arising from the terms of existing contracts to policyholders of contracts in other groups, regardless of whether those payments are expected to be made to current or future policyholders; and
(b)
exclude payments to policyholders in the group that, applying (a), have been included in the fulfilment cash flows of another group.
(a)
to measure the fulfilment cash flows—current discount rates applying paragraph 36;
(b)
to determine the interest to accrete on the contractual service margin applying paragraph 44(b) for insurance contracts without direct participation features—discount rates determined at the date of initial recognition of a group of contracts, applying paragraph 36 to nominal cash flows that do not vary based on the returns on any underlying items;
(c)
to measure the changes to the contractual service margin applying paragraphs B96(a)-B96(b) and B96(d) for insurance contracts without direct participation features—discount rates applying paragraph 36 determined on initial recognition;
(d)
for groups of contracts applying the premium allocation approach that have a significant financing component, to adjust the carrying amount of the liability for remaining coverage applying paragraph 56 —discount rates applying paragraph 36 determined on initial recognition;
(e)
if an entity chooses to disaggregate insurance finance income or expenses between profit or loss and other comprehensive income (see paragraph 88 ), to determine the amount of the insurance finance income or expenses included in profit or loss:
(i)
for groups of insurance contracts for which changes in assumptions that relate to financial risk do not have a substantial effect on the amounts paid to policyholders, applying paragraph B131 —discount rates determined at the date of initial recognition of a group of contracts, applying paragraph 36 to nominal cash flows that do not vary based on the returns on any underlying items;
(ii)
for groups of insurance contracts for which changes in assumptions that relate to financial risk have a substantial effect on the amounts paid to policyholders, applying paragraph B132(a)(i) —discount rates that allocate the remaining revised expected finance income or expenses over the remaining duration of the group of contracts at a constant rate; and
(iii)
for groups of contracts applying the premium allocation approach applying paragraphs 59(b) and B133 —discount rates determined at the date of the incurred claim, applying paragraph 36 to nominal cash flows that do not vary based on the returns on any underlying items.
(a)
cash flows that do not vary based on the returns on any underlying items shall be discounted at rates that do not reflect any such variability;
(b)
cash flows that vary based on the returns on any financial underlying items shall be:
(i)
discounted using rates that reflect that variability; or
(ii)
adjusted for the effect of that variability and discounted at a rate that reflects the adjustment made.
(c)
nominal cash flows (ie those that include the effect of inflation) shall be discounted at rates that include the effect of inflation; and
(d)
real cash flows (ie those that exclude the effect of inflation) shall be discounted at rates that exclude the effect of inflation.
(a)
maximise the use of observable inputs (see paragraph B44 ) and reflect all reasonable and supportable information on non-market variables available without undue cost or effort, both external and internal (see paragraph B49 ). In particular, the discount rates used shall not contradict any available and relevant market data, and any non-market variables used shall not contradict observable market variables.
(b)
reflect current market conditions from the perspective of a market participant.
(c)
exercise judgement to assess the degree of similarity between the features of the insurance contracts being measured and the features of the instrument for which observable market prices are available and adjust those prices to reflect the differences between them.
(a)
if there are observable market prices in active markets for assets in the reference portfolio, an entity shall use those prices (consistent with paragraph 69 of Ind AS 113 ).
(b)
if a market is not active, an entity shall adjust observable market prices for similar assets to make them comparable to market prices for the assets being measured (consistent with paragraph 83 of Ind AS 113 ).
(c)
if there is no market for assets in the reference portfolio, an entity shall apply an estimation technique. For such assets (consistent with paragraph 89 of Ind AS 113 ) an entity shall:
(i)
develop unobservable inputs using the best information available in the circumstances. Such inputs might include the entity’s own data and, in the context of Ind AS 117, the entity might place more weight on long-term estimates than on short-term fluctuations; and
(ii)
adjust those data to reflect all information about market participant assumptions that is reasonably available.
(a)
adjusting for differences between the amount, timing and uncertainty of the cash flows of the assets in the portfolio and the amount, timing and uncertainty of the cash flows of the insurance contracts; and
(b)
excluding market risk premiums for credit risk, which are relevant only to the assets included in the reference portfolio.
(a)
fulfilling a liability that has a range of possible outcomes arising from non-financial risk; and
(b)
fulfilling a liability that will generate fixed cash flows with the same expected present value as the insurance contracts.
(a)
the degree of diversification benefit the entity includes when determining the compensation it requires for bearing that risk; and
(b)
both favourable and unfavourable outcomes, in a way that reflects the entity’s degree of risk aversion.
(a)
risks with low frequency and high severity will result in higher risk adjustments for non-financial risk than risks with high frequency and low severity;
(b)
for similar risks, contracts with a longer duration will result in higher risk adjustments for non-financial risk than contracts with a shorter duration;
(c)
risks with a wider probability distribution will result in higher risk adjustments for non-financial risk than risks with a narrower distribution;
(d)
the less that is known about the current estimate and its trend, the higher will be the risk adjustment for non-financial risk; and
(e)
to the extent that emerging experience reduces uncertainty about the amount and timing of cash flows, risk adjustments for non-financial risk will decrease and vice versa.
(a)
the loss component of the liability for remaining coverage of the underlying insurance contracts at the date of the transaction; and
(b)
the percentage of claims on the underlying insurance contracts the entity expects at the date of the transaction to recover from the group of reinsurance contracts held.
(a)
future insurance contracts that are renewals of insurance contracts recognised at the date of the transaction; and
(b)
future insurance contracts, other than those in (a), after the date of the transaction without paying again insurance acquisition cash flows the acquiree has already paid that are directly attributable to the related portfolio of insurance contracts.
(a)
experience adjustments arising from premiums received in the period that relate to future service, and related cash flows such as insurance acquisition cash flows and premium-based taxes, measured at the discount rates specified in paragraph B72(c) .
(b)
changes in estimates of the present value of the future cash flows in the liability for remaining coverage, except those described in paragraph B97(a), measured at the discount rates specified in paragraph B72(c) .
(c)
differences between any investment component expected to become payable in the period and the actual investment component that becomes payable in the period. Those differences are determined by comparing (i) the actual investment component that becomes payable in the period with (ii) the payment in the period that was expected at the start of the period plus any insurance finance income or expenses related to that expected payment before it becomes payable.
(ca)
differences between any loan to a policyholder expected to become repayable in the period and the actual loan to a policyholder that becomes repayable in the period. Those differences are determined by comparing (i) the actual loan to a policyholder that becomes repayable in the period with (ii) the repayment in the period that was expected at the start of the period plus any insurance finance income or expenses related to that expected repayment before it becomes repayable.
(d)
changes in the risk adjustment for non-financial risk that relate to future service. An entity is not required to disaggregate the change in the risk adjustment for non-financial risk between (i) a change related to non-financial risk and (ii) the effect of the time value of money and changes in the time value of money. If an entity makes such a disaggregation, it shall adjust the contractual service margin for the change related to non-financial risk, measured at the discount rates specified in paragraph B72(c) .
(a)
the effect of the time value of money and changes in the time value of money and the effect of financial risk and changes in financial risk. These effects comprise:
(i)
the effect, if any, on estimated future cash flows;
(ii)
the effect, if disaggregated, on the risk adjustment for non-financial risk; and
(iii)
the effect of a change in discount rate.
(b)
changes in estimates of fulfilment cash flows in the liability for incurred claims.
(c)
experience adjustments, except those described in paragraph B96(a).
(a)
the contractual terms specify that the policyholder participates in a share of a clearly identified pool of underlying items (see paragraphs B105- B106);
(b)
the entity expects to pay to the policyholder an amount equal to a substantial share of the fair value returns on the underlying items (see paragraph B107); and
(c)
the entity expects a substantial proportion of any change in the amounts to be paid to the policyholder to vary with the change in fair value of the underlying items (see paragraph B107).
(a)
the obligation to pay the policyholder an amount equal to the fair value of the underlying items; and
(b)
a variable fee (see paragraphs B110-B118 ) that the entity will deduct from (a) in exchange for the future service provided by the insurance contract, comprising:
(i)
the amount of the entity’s share of the fair value of the underlying items; less
(ii)
fulfilment cash flows that do not vary based on the returns on underlying items.
(a)
an entity can change the underlying items that determine the amount of the entity’s obligation with retrospective effect; or
(b)
there are no underlying items identified, even if the policyholder could be provided with a return that generally reflects the entity’s overall performance and expectations, or the performance and expectations of a subset of assets the entity holds. An example of such a return is a crediting rate or dividend payment set at the end of the period to which it relates. In this case, the obligation to the policyholder reflects the crediting rate or dividend amounts the entity has set, and does not reflect identified underlying items.
(a)
interpret the term ‘substantial’ in both paragraphs in the context of the objective of insurance contracts with direct participation features being contracts under which the entity provides investment-related services and is compensated for the services by a fee that is determined by reference to the underlying items; and
(b)
assess the variability in the amounts in paragraphs B101(b) and B101(c):
(i)
over the duration of the insurance contract; and
(ii)
on a present value probability-weighted average basis, not a best or worst outcome basis (see paragraphs B37-B38 ).
(a)
the cash flows that the entity expects to pay to the policyholder vary with the changes in the fair value of the underlying items because the guaranteed return and other cash flows that do not vary based on the returns on underlying items do not exceed the fair value return on the underlying items; and
(b)
the cash flows that the entity expects to pay to the policyholder do not vary with the changes in the fair value of the underlying items because the guaranteed return and other cash flows that do not vary based on the returns on underlying items exceed the fair value return on the underlying items.
(a)
changes in the fulfilment cash flows other than those specified in (b). An entity shall apply paragraphs B96-B97 , consistent with insurance contracts without direct participation features, to determine to what extent they relate to future service and, applying paragraph 45(c) , adjust the contractual service margin. All the adjustments are measured using current discount rates.
(b)
the change in the effect of the time value of money and financial risks not arising from the underlying items; for example, the effect of financial guarantees. These relate to future service and, applying paragraph 45(c), adjust the contractual service margin, except to the extent that paragraph B115 applies.
(a)
the amount of the entity’s share of the underlying items (see paragraph B112) if the entity mitigates the effect of financial risk on that amount using derivatives or reinsurance contracts held; and
(b)
the fulfilment cash flows set out in paragraph B113(b) if the entity mitigates the effect of financial risk on those fulfilment cash flows using derivatives, non-derivative financial instruments measured at fair value through profit or loss, or reinsurance contracts held.
(a)
an economic offset exists between the insurance contracts and the derivative, non-derivative financial instrument measured at fair value through profit or loss, or reinsurance contract held (ie the values of the insurance contracts and those risk mitigating items generally move in opposite directions because they respond in a similar way to the changes in the risk being mitigated). An entity shall not consider accounting measurement differences in assessing the economic offset.
(b)
credit risk does not dominate the economic offset.
(a)
identifying the coverage units in the group. The number of coverage units in a group is the quantity of insurance contract services provided by the contracts in the group, determined by considering for each contract the quantity of the benefits provided under a contract and its expected coverage period.
(b)
allocating the contractual service margin at the end of the period (before recognising any amounts in profit or loss to reflect the insurance contract services provided in the period) equally to each coverage unit provided in the current period and expected to be provided in the future.
(c)
recognising in profit or loss the amount allocated to coverage units provided in the period.
(a)
an investment component exists, or the policyholder has a right to withdraw an amount;
(b)
the entity expects the investment component or amount the policyholder has a right to withdraw to include an investment return (an investment return could be below zero, for example, in a negative interest rate environment); and
(c)
the entity expects to perform investment activity to generate that investment return.
(a)
the loss recognised on the underlying insurance contracts; and
(b)
the percentage of claims on the underlying insurance contracts the entity expects to recover from the group of reinsurance contracts held.
(a)
adjusted for a financing effect; and
(b)
excluding any investment components.
(a)
amounts related to the provision of services, comprising:
(i)
insurance service expenses, excluding any amounts relating to the risk adjustment for non-financial risk included in (ii) and any amounts allocated to the loss component of the liability for remaining coverage;
(ia)
amounts related to income tax that are specifically chargeable to the policyholder;
(ii)
the risk adjustment for non-financial risk, excluding any amounts allocated to the loss component of the liability for remaining coverage; and
(iii)
the contractual service margin.
(b)
amounts related to insurance acquisition cash flows.
(a)
changes that do not relate to services provided in the period, for example:
(i)
changes resulting from cash inflows from premiums received;
(ii)
changes that relate to investment components in the period;
(iia)
changes resulting from cash flows from loans to policyholders;
(iii)
changes that relate to transaction-based taxes collected on behalf of third parties (such as premium taxes, value added taxes and goods and services taxes) (see paragraph B65(i) );
(iv)
insurance finance income or expenses;
(v)
insurance acquisition cash flows (see paragraph B125); and
(vi)
derecognition of liabilities transferred to a third party.
(b)
changes that relate to services, but for which the entity does not expect consideration, ie increases and decreases in the loss component of the liability for remaining coverage (see paragraphs 47-52 ).
(a)
insurance service expenses incurred in the period (measured at the amounts expected at the beginning of the period), excluding:
(i)
amounts allocated to the loss component of the liability for remaining coverage applying paragraph 51(a) ;
(ii)
repayments of investment components;
(iii)
amounts that relate to transaction-based taxes collected on behalf of third parties (such as premium taxes, value added taxes and goods and services taxes) (see paragraph B65(i) );
(iv)
insurance acquisition expenses (see paragraph B125); and
(v)
the amount related to the risk adjustment for non-financial risk (see (b)).
(b)
the change in the risk adjustment for non-financial risk, excluding:
(i)
changes included in insurance finance income or expenses applying paragraph 87 ;
(ii)
changes that adjust the contractual service margin because they relate to future service applying paragraphs 44(c) and 45(c) ; and
(iii)
amounts allocated to the loss component of the liability for remaining coverage applying paragraph 51(b) .
(c)
the amount of the contractual service margin recognised in profit or loss in the period, applying paragraphs 44(e) and 45(e) .
(d)
other amounts, if any, for example, experience adjustments for premium receipts other than those that relate to future service (see paragraph B96(a) ).
(a)
on the basis of the passage of time; but
(b)
if the expected pattern of release of risk during the coverage period differs significantly from the passage of time, then on the basis of the expected timing of incurred insurance service expenses.
(a)
assumptions about inflation based on an index of prices or rates or on prices of assets with inflation-linked returns are assumptions that relate to financial risk;
(b)
assumptions about inflation based on an entity’s expectation of specific price changes are not assumptions that relate to financial risk; and
(c)
changes in the measurement of a group of insurance contracts caused by changes in the value of underlying items (excluding additions and withdrawals) are changes arising from the effect of the time value of money and financial risk and changes therein.
(a)
is based on characteristics of the contracts, without reference to factors that do not affect the cash flows expected to arise under the contracts. For example, the allocation of the finance income or expenses shall not be based on expected recognised returns on assets if those expected recognised returns do not affect the cash flows of the contracts in the group.
(b)
results in the amounts recognised in other comprehensive income over the duration of the group of contracts totalling zero. The cumulative amount recognised in other comprehensive income at any date is the difference between the carrying amount of the group of contracts and the amount that the group would be measured at when applying the systematic allocation.
(a)
a systematic allocation for the finance income or expenses arising from the estimates of future cash flows can be determined in one of the following ways:
(i)
using a rate that allocates the remaining revised expected finance income or expenses over the remaining duration of the group of contracts at a constant rate; or
(ii)
for contracts that use a crediting rate to determine amounts due to the policyholders—using an allocation that is based on the amounts credited in the period and expected to be credited in future periods.
(b)
a systematic allocation for the finance income or expenses arising from the risk adjustment for non-financial risk, if separately disaggregated from other changes in the risk adjustment for non-financial risk applying paragraph 81, is determined using an allocation consistent with that used for the allocation for the finance income or expenses arising from the future cash flows.
(c)
a systematic allocation for the finance income or expenses arising from the contractual service margin is determined:
(i)
for insurance contracts that do not have direct participation features, using the discount rates specified in paragraph B72(b) ; and
(ii)
for insurance contracts with direct participation features, using an allocation consistent with that used for the allocation for the finance income or expenses arising from the future cash flows.
(a)
include the accumulated amount previously included in other comprehensive income by the date of the change as a reclassification adjustment in profit or loss in the period of change and in future periods, as follows:
(i)
if the entity had previously applied paragraph 88(b)—the entity shall include in profit or loss the accumulated amount included in other comprehensive income before the change as if the entity were continuing the approach in paragraph 88(b) based on the assumptions that applied immediately before the change; and
(ii)
if the entity had previously applied paragraph 89(b)—the entity shall include in profit or loss the accumulated amount included in other comprehensive income before the change as if the entity were continuing the approach in paragraph 89(b) based on the assumptions that applied immediately before the change.
(b)
not restate prior period comparative information.
(a)
the date of initial application is the beginning of the annual reporting period in which an entity first applies Ind AS 117; and
(b)
the transition date is the beginning of the annual reporting period immediately preceding the date of initial application.
(a)
an entity is not required to present the quantitative information required by paragraph 28(f) of Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors ; and
(b)
an entity shall not apply the option in paragraph B115 for periods before the transition date. An entity may apply the option in paragraph B115 prospectively on or after the transition date if, and only if, the entity designates risk mitigation relationships at or before the date it applies the option.
(a)
identify, recognise and measure each group of insurance contracts as if Ind AS 117 had always applied;
(aa)
identify, recognise and measure any assets for insurance acquisition cash flows as if Ind AS 117 had always applied (except that an entity is not required to apply the recoverability assessment in paragraph 28E before the transition date);
(b)
derecognise any existing balances that would not exist had Ind AS 117 always applied; and
(c)
recognise any resulting net difference in equity.
(a)
the modified retrospective approach in paragraphs C6-C19A, subject to paragraph C6(a); or
(b)
the fair value approach in paragraphs C20-C24B.
(a)
the entity chooses to apply the risk mitigation option in paragraph B115 to the group of insurance contracts prospectively from the transition date; and
(b)
the entity has used derivatives, non-derivative financial instruments measured at fair value through profit or loss, or reinsurance contracts held to mitigate financial risk arising from the group of insurance contracts, as specified in paragraph B115 , before the transition date.
(a)
the modified retrospective approach in paragraphs C14B-C14D and C17A, subject to paragraph C6(a); or
(b)
the fair value approach in paragraphs C24A-C24B.
(a)
use reasonable and supportable information. If the entity cannot obtain reasonable and supportable information necessary to apply the modified retrospective approach, it shall apply the fair value approach.
(b)
maximise the use of information that would have been used to apply a fully retrospective approach, but need only use information available without undue cost or effort.
(a)
assessments of insurance contracts or groups of insurance contracts that would have been made at the date of inception or initial recognition;
(b)
amounts related to the contractual service margin or loss component for insurance contracts without direct participation features;
(c)
amounts related to the contractual service margin or loss component for insurance contracts with direct participation features; and
(d)
insurance finance income or expenses.
(a)
how to identify groups of insurance contracts, applying paragraphs 14-24 ;
(b)
whether an insurance contract meets the definition of an insurance contract with direct participation features, applying paragraphs B101-B109 ;
(c)
how to identify discretionary cash flows for insurance contracts without direct participation features, applying paragraphs B98-B100 ; and
(d)
whether an investment contract meets the definition of an investment contract with discretionary participation features within the scope of Ind AS 117, applying paragraph 71.
(a)
using an observable yield curve that, for at least three years immediately before the transition date, approximates the yield curve estimated applying paragraphs 36 and B72-B85 , if such an observable yield curve exists.
(b)
if the observable yield curve in paragraph (a) does not exist, estimate the discount rates that applied at the date of initial recognition (or subsequently) by determining an average spread between an observable yield curve and the yield curve estimated applying paragraphs 36 and B72-B85, and applying that spread to that observable yield curve. That spread shall be an average over at least three years immediately before the transition date.
(a)
groups of insurance contracts that are recognised at the transition date; and
(b)
groups of insurance contracts that are expected to be recognised after the transition date.
(a)
the adjustment to the contractual service margin of a group of insurance contracts recognised at the transition date and any asset for insurance acquisition cash flows relating to that group; and
(b)
the asset for insurance acquisition cash flows for groups of insurance contracts expected to be recognised after the transition date.
(a)
if the entity applies C13 to estimate the discount rates that apply on initial recognition, use those rates to accrete interest on the contractual service margin; and
(b)
to the extent permitted by paragraph C8, determine the amount of the contractual service margin recognised in profit or loss because of the transfer of services before the transition date, by comparing the remaining coverage units at that date with the coverage units provided under the group of contracts before the transition date (see paragraph B119 ).
(a)
the loss component of the liability for remaining coverage for the underlying insurance contracts at the transition date (see paragraphs C16 and C20); and
(b)
the percentage of claims for the underlying insurance contracts the entity expects to recover from the group of reinsurance contracts held.
(a)
the total fair value of the underlying items at that date; minus
(b)
the fulfilment cash flows at that date; plus or minus
(c)
an adjustment for:
(i)
amounts charged by the entity to the policyholders (including amounts deducted from the underlying items) before that date.
(ii)
amounts paid before that date that would not have varied based on the underlying items.
(iii)
the change in the risk adjustment for non-financial risk caused by the release from risk before that date. The entity shall estimate this amount by reference to the release of risk for similar insurance contracts that the entity issues at the transition date.
(iv)
insurance acquisition cash flows paid (or for which a liability has been recognised applying another Ind AS) before the transition date that are allocated to the group (see paragraph C17A).
(d)
if (a)-(c) result in a contractual service margin—minus the amount of the contractual service margin that relates to services provided before that date. The total of (a)-(c) is a proxy for the total contractual service margin for all services to be provided under the group of contracts, ie before any amounts that would have been recognised in profit or loss for services provided. The entity shall estimate the amounts that would have been recognised in profit or loss for services provided by comparing the remaining coverage units at the transition date with the coverage units provided under the group of contracts before the transition date; or
(e)
if (a)-(c) result in a loss component—adjust the loss component to nil and increase the liability for remaining coverage excluding the loss component by the same amount.
(a)
an entity is permitted to determine the discount rates at the date of initial recognition of a group specified in paragraphs B72(b)-B72(e)(ii) and the discount rates at the date of the incurred claim specified in paragraph B72(e)(iii) at the transition date instead of at the date of initial recognition or incurred claim.
(b)
if an entity chooses to disaggregate insurance finance income or expenses between amounts included in profit or loss and amounts included in other comprehensive income applying paragraphs 88(b) or 89(b) , the entity needs to determine the cumulative amount of insurance finance income or expenses recognised in other comprehensive income at the transition date to apply paragraph 91(a) in future periods. The entity is permitted to determine that cumulative amount either by applying paragraph C19(b) or:
(i)
as nil, unless (ii) applies; and
(ii)
for insurance contracts with direct participation features to which paragraph B134 applies, as equal to the cumulative amount recognised in other comprehensive income on the underlying items.
(a)
if an entity applies paragraph C13 to estimate the discount rates that applied at initial recognition (or subsequently), it shall also determine the discount rates specified in paragraphs B72(b)-B72(e) applying paragraph C13; and
(b)
if an entity chooses to disaggregate insurance finance income or expenses between amounts included in profit or loss and amounts included in other comprehensive income, applying paragraphs 88(b) or 89(b), the entity needs to determine the cumulative amount of insurance finance income or expenses recognised in other comprehensive income at the transition date to apply paragraph 91(a) in future periods. The entity shall determine that cumulative amount:
(i)
for insurance contracts for which an entity will apply the methods of systematic allocation set out in paragraph B131 —if the entity applies paragraph C13 to estimate the discount rates at initial recognition— using the discount rates that applied at the date of initial recognition, also applying paragraph C13;
(ii)
for insurance contracts for which an entity will apply the methods of systematic allocation set out in paragraph B132 —on the basis that the assumptions that relate to financial risk that applied at the date of initial recognition are those that apply on the transition date, ie as nil;
(iii)
for insurance contracts for which an entity will apply the methods of systematic allocation set out in paragraph B133 —if the entity applies paragraph C13 to estimate the discount rates at initial recognition (or subsequently)—using the discount rates that applied at the date of the incurred claim, also applying paragraph C13; and
(iv)
for insurance contracts with direct participation features to which paragraph B134 applies—as equal to the cumulative amount recognised in other comprehensive income on the underlying items.
(a)
the loss component of the liability for remaining coverage for the underlying insurance contracts at the transition date (see paragraphs C16 and C20); and
(b)
the percentage of claims for the underlying insurance contracts the entity expects to recover from the group of reinsurance contracts held.
(a)
how to identify groups of insurance contracts, applying paragraphs 14-24 ;
(b)
whether an insurance contract meets the definition of an insurance contract with direct participation features, applying paragraphs B101-B109 ;
(c)
how to identify discretionary cash flows for insurance contracts without direct participation features, applying paragraphs B98-B100 ; and
(d)
whether an investment contract meets the definition of an investment contract with discretionary participation features within the scope of Ind AS 117, applying paragraph 71 .
(a)
reasonable and supportable information for what the entity would have determined given the terms of the contract and the market conditions at the date of inception or initial recognition, as appropriate; or
(b)
reasonable and supportable information available at the transition date.
(a)
retrospectively—but only if it has reasonable and supportable information to do so; or
(b)
as nil—unless (c) applies; and
(c)
for insurance contracts with direct participation features to which paragraph B134 applies—as equal to the cumulative amount recognised in other comprehensive income from the underlying items.
(a)
recoveries of insurance acquisition cash flows from premiums of insurance contracts issued before the transition date but not recognised at the transition date;
(b)
future insurance contracts that are renewals of insurance contracts recognised at the transition date and insurance contracts described in (a); and
(c)
future insurance contracts, other than those in (b), after the transition date without paying again insurance acquisition cash flows the entity has already paid that are directly attributable to the related portfolio of insurance contracts.
(a)
disclose qualitative information that enables users of financial statements to understand:
(i)
the extent to which the classification overlay has been applied (for example, whether it has been applied to all financial assets derecognised in the comparative period);
(ii)
whether and to what extent the impairment requirements in Section 5.5 of Ind AS 109 have been applied (see paragraph C28C);
(b)
only apply those paragraphs to comparative information for reporting periods between the transition date to Ind AS 117 and the date of initial application of Ind AS 117 (see paragraphs C2 and C25); and
(c)
(a)
may reassess whether an eligible financial asset meets the condition in paragraph 4.1.2(a) or paragraph 4.1.2A(a) of Ind AS 109. A financial asset is eligible only if the financial asset is not held in respect of an activity that is unconnected with contracts within the scope of Ind AS 117. Examples of financial assets that would not be eligible for reassessment are financial assets held in respect of banking activities or financial assets held in funds relating to investment contracts that are outside the scope of Ind AS 117.
(b)
shall revoke its previous designation of a financial asset as measured at fair value through profit or loss if the condition in paragraph 4.1.5 of Ind AS 109 is no longer met because of the application of Ind AS 117.
(c)
may designate a financial asset as measured at fair value through profit or loss if the condition in paragraph 4.1.5 of Ind AS 109 is met.
(d)
may designate an investment in an equity instrument as at fair value through other comprehensive income applying paragraph 5.7.5 of Ind AS 109 .
(e)
may revoke its previous designation of an investment in an equity instrument as at fair value through other comprehensive income applying paragraph 5.7.5 of Ind AS 109.
(a)
the previous carrying amount of those financial assets; and
(b)
the carrying amount of those financial assets at the date of initial application.
(a)
if paragraph C29(a) applies—its basis for determining eligible financial assets;
(b)
if any of paragraphs C29(a)-C29(e) apply:
(i)
the measurement category and carrying amount of the affected financial assets determined immediately before the date of initial application of Ind AS 117; and
(ii)
the new measurement category and carrying amount of the affected financial assets determined after applying paragraph C29.
(c)
if paragraph C29(b) applies—the carrying amount of financial assets in the balance sheet that were previously designated as measured at fair value through profit or loss applying paragraph 4.1.5 of Ind AS 109 that are no longer so designated.
(a)
how it applied paragraph C29 to financial assets the classification of which has changed on initially applying Ind AS 117;
(b)
the reasons for any designation or de-designation of financial assets as measured at fair value through profit or loss applying paragraph 4.1.5 of Ind AS 109; and
(c)
why the entity came to any different conclusions in the new assessment applying paragraphs 4.1.2(a) or 4.1.2A(a) of Ind AS 109.
Notes, amendments & references (2)
# This Ind AS was notified vide G.S.R. 492(E) dated 12th August, 2024. Subsequently, MCA vide Notification No. G.S.R. 602(E) dated 28th September, 2024 provided that an insurer or insurance company may provide its financial statement as per Ind AS 104 for the purposes of consolidated financial statements by its parent or investor or venturer till the Insurance Regulatory and Development Authority notifies the Ind AS 117 and for this purpose, Ind AS 104 shall, continue to apply.
1 CU denotes currency unit.