IASB issues amendment to the transition requirements in IFRS 17

Yesterday, the IASB issued a narrow-scope amendment to IFRS 17 Insurance Contracts. This amendment introduces an additional transition requirement affecting how comparative information are presented during the year of initial application of IFRS 9 Financial Instruments and IFRS 17. This relief allows an entity for applying a “classification overlay” for the purpose of presenting comparative information about a financial asset if the comparative information for that financial asset has not been restated for IFRS 9. This overlay allows for using the expected classification determined on the basis of information available at the transition date.

Further, an additional requirement provides a relief for those entities initially applying IFRS 17 while IFRS 9 had already been applied before. If so, an entity may revoke and reassess previous designations of financial assets that are eligible under IFRS 9.