The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) project to develop a single source of principle-based guidance to account for all types of insurance contracts.
A comprehensive, globally accepted, high-quality standard is needed to replace the wide variety of standards and practices currently applied to insurance contracts in different countries. Carried out jointly by the IASB and the Financial Accounting Standards Board (FASB), this project’s aim is to develop a comprehensive measurement approach for all types of insurance contracts issued by entities (and reinsurance contracts held by entities).
The standard will replace the interim standard, International Financial Reporting Standard (IFRS) 4 Insurance Contracts that allows insurers to continue using various existing national accounting practices.
The AcSB’s due process includes ensuring that Canadian entities’ financial reporting needs are considered by the IASB and issuing the AcSB’s own exposure draft on each IASB proposal. Subject to the responses to the AcSB’s exposure draft on whether the IASB’s proposals are appropriate for application in Canada, the AcSB expects that the amendments will be incorporated into Canadian GAAP in accordance with the AcSB’s strategy of adopting IFRSs for publicly accountable enterprises.