International Financial Reporting Standard (IFRS 17) – Insurance Contracts was issued in May 2017 and is effective for annual periods beginning on or after 1 January 2023 where the initial application was deferred to enable insurance companies to get ready for its implementation. IFRS 17 replaces IFRS 4, introducing new requirements including the recognition and measurement approach for insurance contracts.
IFRS 17 is intended to provide more transparent quality information about insurance contracts to enable all stakeholders participating in the insurance industry and investors to make timely informed decisions.
Baker Tilly in Kuwait, an independent member firm of Baker Tilly international, explained that the accounting framework is the driving factor and has significant influence in applying IFRS 17 as it provides the basis of recording and extracting the information used in managing insurance contracts and preparing the financial statements.
Accounting knowledge is a crucial challenge for insurance companies in terms of obtaining an understanding of the IFRS 17 requirements, which include:
Amending the accounting policies to reflect the selected approach for recognition and measurement of insurance contracts. Redesigning the chart of accounts (COA) to ensure representing the financial statements as per IFRST 17 requirements. Using an engine software for managing insurance contracts to enable the classification of insurance contracts in addition to calculating technical reserves and cash flows discounted over the term of insurance contracts.
From actuarial perspective, Baker Tilly in Kuwait highlighted that implementing IFRS 17 will require insurers to have IFRS 17 implementation engine, which will help insurance companies classify insurance contracts as per the IFRS 17 requirement as this task would not be carried out manually given heavy details involved and the need to protect and regularly update this information, and the reliability of the financial outputs derived from the same. Such outputs are extracted and presented in the financial statements.
In this regard, Baker Tilly Kuwait provides Further Edge platform for IFRS 17 implementation as Managed Service, which meets IFRS 17 requirements, including performing the actuarial calculations and concluding financial results.
Moreover, Baker Tilly Kuwait added that Kuwait Insurance Regulatory Unit (IRU) has special requirements related to the IFRS 17 implementation where IRU issued circular No. 2 of 2023. In addition, the circular requires the concerned companies to engage an independent auditor to issue an assurance report on their compliance with the IFRS requirements set forth in the said circular.
Baker Tilly Kuwait is IRU-licensed actuary and has in-depth knowledge, extensive experience and highly qualified professional teams enabling it to provide the complete range of IFRS 17 implementation services, namely:
IFRS 17 accounting implementation IFRS 17 Engine (Calculator) Managed Service Assurance reports to the IRU
Baker Tilly in Kuwait is an independent member of the Baker Tilly International network based in the UK, ranked amongst the top 10 global accounting networks. The firm provides auditing, assurance, and tax services as well as consulting & advisory services in accounting, investment, management, financial, actuarial, and information technology to assist several sectors such as government, oil and gas, banks, listed companies, licensed companies, and other entities.
Media contact Details
Baker Tilly Kuwait
https://www.bakertilly.com.kw/en/
phone number: +965 1887799
City: Kuwait City
Country: State of Kuwait
Contact Person: Hisham Sorour
Source: Story.KISSPR.com
Release ID: 653197
