IFRS 17 - Forsikringskontrakter: Samt regnskabsbrugers nytteværdi af regnskabet

Theis Østergaard Slebo & Jóhannes Liasson Rasmussen

Student thesis: Master thesis


The International Accounting Standard Board issued in 2017 a new accounting standard for insurance contracts, IFRS 17. IFRS 17 aims to unify insurance accounting across countries. The implementation has been delayed from the original date of 2021, and the standard will take effect from 2023. IFRS 17 defines the accounting principles of insurance contracts and replaces the interim standard IFRS 4. The reasoning behind developing a new standard for insurance contracts, is that IFRS 4 has always been intended to serve as an interim standard, and therefore a short-term solution, whilst a more complete and long-term solution for insurance contracts was being developed. Due to being an interim standard, IFRS 4 has many deficiencies, where one of them is that IFRS 4 doesn’t relate to the measurement of insurance contracts, instead it has been up to local legislation. In Denmark, even though the accounting principles are IFRS, insurance contracts are De facto accounted after Regnskabsbekendtgørelsen, which is based on Solvency II. Regnskabsbekendtgørelsen is balance oriented, whereas IFRS 17 is performance oriented on an income statement principle.
This has caused some challenges, among them are poor transparency and comparability across countries. This paper aims to research the reasoning behind the development of IFRS 17 and how it's going to affect the recognition and measurement of insurance contracts for Danish non-life insurance companies who apply IFRS as their accounting policies. Furthermore, we are going to evaluate if the complexity of the standard raises any issues with the Conceptual Framework. The ultimate aim of the research is finding out how IFRS 17 will benefit the stakeholders.
This will be accomplished from a theoretical comparability analysis of how insurance contracts are being accounted after Regnskabsbekendtgørelsen and IFRS 17, in order to gain an understanding of the differences. To support and validate the conclusions, interviews has been held with experts within the industry, along with a review of comment letters and other published papers about the subject.
Based on the analysis, it can be concluded that the implementation of IFRS 17 will increase the comparability of the annual reports, compared to the legislation that’s eligible today. However, there is still an issue with comparability, due to that IFRS 17 is principle based. A principle-based standard opens up for accounting estimates which may have a negative effect on comparability. Furthermore, it can be concluded that transparency will be increased, due to the lower aggregation of contracts and due to the implementation of CSM. The implementation of IFRS 17 will therefore be beneficial for the stakeholders.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2020
Number of pages128