From the IFRS Institute – March 2, 2023
Unlike the US GAAP insurance standard1 which applies only to insurance companies, IFRS 172 applies to all issuers of insurance contracts, regardless of industry. As a result, many companies could be affected starting in 2023, when IFRS 17 has become effective. While insurance companies have been working on their transition for several years, this may not be true for non-insurers. Accounting for contracts in scope of IFRS 17 may be challenging, but there are several scope exemptions and elections that could be beneficial for non-insurers.
Effective January 1, 2023 for calendar-year companies, IFRS 17 is replacing IFRS 43. IFRS 17 contains more detailed and complex prescriptive guidance for recognition, measurement, presentation and disclosure and its scope goes beyond the insurance industry. To understand if IFRS 17 applies to a company, it is key to evaluate if the company’s contracts meet the definition of an insurance contract, as contracts do not need to be labeled insurance contracts to be in the scope of IFRS 17.