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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.

Summary

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.

Looking for the standard?

Practical guidance on this standard is now on our main IFRS 4 Insurance Contracts page, with links to eIFRS, the full text standard, eBooks and other resources.

The IFRS:

  • 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 

Timeline

Date Update
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IFRS 4 will be withdrawn and replaced by IFRS 17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.