Media IFRS 17: Guidance for Risk Adjustments

IFRS 17: Guidance for Risk Adjustments

uploaded April 18, 2024 Views: 99 Comments: 0 Favorite: 4 CPD

IFRS 17 requires that risks inherent in the cash flows of the insurance contracts are considered in measurement, differentiating between financial risks and non-financial risks. While the financial risks are measured at their current (estimated) market value, non-financial risks are measured at “the compensation that the entity requires for bearing the uncertainty about the amount and timing of the cash flows that arises from non-financial risk”.

Identifying the uncertainties, for both amount and timing, factors influencing the uncertainties like random deviations or changes of risk over time and differentiating between financial and non-financial risk for quantifying the risk and identifying the entity-specific risk aversion for associating a value to the estimated quantity of risk demands a deep understanding of the concepts of IFRS 17.

Categories: AFIR / ERM / RISK
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