From left, Wilbert Spence, KPMG in Jamaica partner and head of corporate citizenship; Chris Brundrett, IFRS specialist; and Sandra Edwards, KPMG in Jamaica partner, listen intently to Dale Brown, IFRS specialist at the KPMG in Jamaica’s Annual IFRS Update Seminar on Wednesday (September 18) at AC Hotel Kingston.

International Financial Reporting Standards (IFRS) specialist and consultant, Dale Brown says with the upcoming IFRS 17, effective January 1, 2022, insurance companies will have to fundamentally change the way they manage their insurance contracts.

The IFRS provides a common global language for business affairs, so that company accounts are understandable and comparable across international boundaries. IFRS was developed by the International Accounting Standards Board (IASB), an independent, non-profit organisation.

Brown in an interview with the Jamaica Observer indicated that while IFRS 17 insurance contracts was first published in 2017 and initially set to come in effect on January 1, 2021, that date was deferred for a year and will come into effect in 2022.

“The objective of IFRS 17 is to provide a common, high-quality standard that addresses recognition, measurement, presentation and disclosure requirements for insurance contracts,” Brown told Sunday Finance.

“Some of the requirements of IFRS 17 are such that companies will need to start to gather information in a different manner than they may have done in the past, [which will] require different processes, procedures and controls,” he continued.

Brown added that IFRS 17 will replace the current insurance contracts model IFRS 4.

IFRS 17 combines current measurement of a company’s future cash flows, with the recognition of profit over the period that services are provided under the contract.It also presents insurance service results — including presentation of insurance revenue — separately from insurance finance income or expenses, and requires an entity to make an accounting policy choice of whether to recognise all insurance finance income or expenses in profit or loss, or to recognise some of that income or expenses in other comprehensive income.

http://www.jamaicaobserver.com/sunday-finance/new-international-accounting-rule-ifrs-17-to-be-implemented-in-2022-will-change-how-insurance-companies_175328