IASB publishes ED/2015/11 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts

The IASB publishes the Exposure Draft ED/2015/11 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts  (Proposed amendments to IFRS 4), which is designed to address the concerns of some interested parties about the different effective dates of IFRS 9 Financial Instruments and the forthcoming new insurance contracts Standard. The Exposure Draft introduces two approaches that should be included in the existing IFRS 4 Insurance Contracts:

• Overlay Approach: An entity that issues contracts within the scope of IFRS 4 is permitted to reclassify, from profit or loss to other comprehensive income, some of the income or expenses arising from designated financial that are measured at FVPL in their entirety applying IFRS but would not have been so measured applying IAS 39.
• Temporary exemption from applying IFRS 9: Entities whose predominant activity is issuing contracts within the scope of IFRS 4 can qualify for the temporary exemption from applying IFRS 9. The temporary exemption from applying IFRS 9 should expire at the start of annual reporting periods beginning on or after 1 January 2021.

Because the matter is narrow in scope and urgent the IASB has set a comment period for the Exposure Draft of 60 days. Comments should be submitted in writing so as to be received no later than 8 February 2016 (www.ifrs.org). (IASB Press Release/ snapshot)