International Accounting Standards
International Accounting Standards
International Accounting Standards
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19<br />
IFRS 4 –Phase II<br />
May 2007: IASB published a Discussion Paper (DP) “Preliminary Views on<br />
Insurance Contracts”<br />
– Issues addressed in the DP:<br />
• Current Exit Value approach (CEV)<br />
• Single approach for life and non‐life insurance contracts<br />
• Risk Margin Assumptions<br />
• No locking of assumptions/”Unlocking”<br />
• Discount rate<br />
• Incorporating assumptions of premiums based on guaranteed insurability<br />
• Estimating cash flows based on market participant view<br />
• Possibility of recognition of gains and losses at inception<br />
• Use of entity’s own credit standing<br />
• Acquisition costs to be expensed, no deferral allowed<br />
19
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