IFRS 4 summary and timeline
A summary of IFRS 4 Insurance Contracts, including information on current proposals and a timeline of past amendments, announcements, exposure drafts and consultations.
IFRS 4 applies to virtually all insurance and reinsurance contracts that an entity issues and to reinsurance contracts that it holds. An insurance contract is a contract under which the insurer accepts significant risk from the policyholder by agreeing to compensate them if a specified uncertain future event adversely affects the policyholder.
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- Prohibits provisions for possible claims under contracts not in existence at the reporting date
- Requires a test for the adequacy of recognised insurance liabilities
- Requires an impairment test for reinsurance assets
- Requires an insurer to keep insurance liabilities in its statement of financial position (balance sheet) until they are discharged, cancelled or expire
- Prohibits the offsetting of insurance liabilities against related reinsurance assets. The IFRS also prohibits the introduction of the following practices although allows their continued use where used previously:
- Measuring insurance liabilities on an undiscounted basis
- Measuring contractual rights to future investment management fees at an amount that exceeds their fair value
- Using non-uniform accounting policies for the insurance liabilities of subsidiaries
|1 January 2023
||IFRS 4 will be withdrawn and replaced by IFRS 17
|5 January 2021||UK-adoption of Amendments for IBOR Phase 2 and Amendments to IFRS 4
The Interest Rate Benchmark Reform—Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) was adopted for use in the UK and is effective for annual periods beginning on or after 1 January 2021. The Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4) was also adopted.
|27 August 2020||IASB issues Interest Rate Benchmark Reform Phase 2 – amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
Effective for annual periods beginning on or after 1 January 2021.
|25 June 2020||IASB issues Extension of the Temporary Exemption from applying IFRS 9 (amendments to IFRS 4)
|18 May 2017
||IASB issues IFRS 17 which will replace IFRS 4
|12 September 2016||
IASB issues Applying IFRS 9 with IFRS 4 amendments to IFRS 4
Applicable when IFRS 9 is first applied (overlay approach) or for annual periods beginning on or after 1 January 2018 (deferral approach). Press release issued on 12 September 2016 announcing amendments to IFRS 4. Amendments address concerns surrounding the implementation of IFRS 9.
|9 December 2015||IASB proposes amendments to the current Insurance Contracts Standard to provide temporary reliefs for insurers
Press release issued on 9 December 2015 announcing amendments to address the temporary consequences of the different effective dates for IFRS 9 and the new insurance contracts standard that will replace IFRS 4.
|30 July 2010||IASB proposes improvements to insurance accounting
Press release issued on 30 July 2010.
|18 August 2005
||IASB issues Financial Guarantee Contracts (amendments to IFRS 4)
Effective for annual periods beginning on or after 1 January 2006.
|31 March 2004
||IASB issues IFRS 4
Effective for annual periods beginning on or after 1 January 2005.