The proposed postponement of the implementation deadline for International Financial Reporting Standard 17 (IFRS17) to January 2022 from January 2021 will allow insurers more time to prepare, ensuring there is no impairment of information quality, says S&P Global Ratings.
S&P said, ”We remain concerned about the data and systems challenges that insurers will face in preparing for the new standard, but feel that the additional year will provide some buffer for insurers' implementation projects.
“However, we hope that any final amendments to the standard are settled as soon as possible so that the additional 12 months can be devoted chiefly to preparation rather than debate.
“Given the material change to reporting with IFRS17, we assume insurers also might use the extra time for transparent communication. For Korean life insurers, the extra year might also support ongoing capital raising efforts.”
The International Accounting Standards Board (IASB), an independent body responsible for the development and publication of IFRSs, earlier this month voted to delay the implementation of IFRS 17 for one year to 1 January 2022. The proposed deferral is subject to public consultation, which is expected next year. IFRS17 covers accounting for insurance contracts.