The Fairly Presentation of the Recognition of Insurance Contracts under IFRS 17

Mathias Ulrich Stagegaard Winther

Student thesis: Master thesis


The new International Financial Reporting Standard (IFRS) for Insurance Contracts where approved
by the International Accounting Standards Board (IASB), may 2017. This standard called IFRS 17
replaces the IFRS 4 standard that has been the standard for Insurance Contracts so far. This standard
establishes the principles for the measurement, presentation and disclosures of insurance contracts.
The purpose of this thesis
This master thesis will try to understand the effect of the replacement of IFRS 4 by IFRS 17. By
understanding the effect of the transition to IFRS 17, I will try to obtain an insight hereby to conclude
whether the new standard will give the user of the financial statement a more fairly presentation of
insurance contracts.
The methodology in the thesis
This thesis has a foundation of the constructivist paradigm since the focus of the thesis is to understand the two standards by the fairly presentation of the financial statement for the user. Therefore
the fairly presentation is based on constructed principles which means the fairly presentation are constructed based on the reporting standards.
The result based on the obtained knowledge
I do find the new reporting standard, IFRS 17, for insurance contracts more useful for the user due to
a more fairly presentation of a company’s insurance contracts. The aggregation-level is one of the
key aspects in the accounting standard and it is the foundation for a fairly presentation of the insurance
liabilities. IFRS 4 opens up for local regulations and therefore different ways of measure and recognition of insurance contracts. IFRS 17 will contribute to a more consistent way of handling a company’s insurance contracts. With the new standard follows a set of accounting models to valuate
insurance liabilities. The valuation of insurance contracts is more forward-looking in its measurements to fair value compared with IFRS 4.
The accounting standard do support the conceptual framework issued by IASB to harmonize regulations, accounting standards and procedures relating to the preparation and presentation of financial
statements. This means the IFRS 17 will harmonize the way of preparation and presentation of insurance contracts so the financial statement will provide fairly information that is useful in making economic decisions.
This is why I conclude that the standard will result in a more fairly presentation of information due
to a consistent and timely way of measure and recognize insurance contracts.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2017
Number of pages79
SupervisorsLeif Christensen