The International Accounting Standards Board (IASB), an independent body responsible for the development and publication of International Financial Reporting Standards (IFRSs), has voted to delay the implementation of IFRS 17 for one year to 1 January 2022.
IFRS 17 will replace IFRS 4 on accounting for insurance contracts. Its previous implementation date was 1 January 2021.
The IASB has also decided to propose extending to 2022 the temporary exemption for insurers to apply the financial instruments Standard, IFRS 9, so that both IFRS 9 and IFRS 17 can be applied at the same time.
The decision to propose a one-year deferral, made at a meeting this month in London, acknowledges the uncertainty that arises from the Board’s discussions about IFRS 17, while being responsive to comments from stakeholders that implementation should not be unduly disrupted. The decision will help companies with their planning.
The proposed deferral is subject to public consultation, which is expected next year.
There have been several calls by trade bodies around the world to delay IFRS 17 for two years. In particular, in October, a group of nine insurance associations wrote a joint letter to Mr Hans Hoogervorst, chair of UK-headquartered IASB asking for improvements to IFRS 17 as well as a delay in its implementation. The letter said that extensive testing, together with insurers’ detailed implementation planning, had confirmed that a number of important issues still needed to be resolved in order to ensure the quality and operational practicability of the new standard.