New for-profit insurance standard and income tax interpretation

We have issued a new for-profit Standard and an Interpretation.

NZ IFRS 17 Insurance Contracts

NZ IFRS 17 is based on IFRS 17 Insurance Contracts as issued by the International Accounting Standards Board (IASB).

The standard establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the standard. 

It also requires similar principles to be applied to reinsurance contracts held and investment contracts with discretionary participation features issued.

On adoption NZ IFRS 17 supersedes NZ IFRS 4 Insurance Contracts, including Appendix C Life Insurance Entities and Appendix D Financial Reporting of Insurance Activities.

The standard is effective for annual periods beginning on or after 1 January 2021 with early application permitted.

The IASB has published various material that supports the implementation of IFRS 17 on the IFRS® Foundation website

Examples include a Feedback Statement, an Effects Analysis, webcasts and podcasts.

NZ IFRIC 23 Uncertainty over Income Tax Treatments

NZ IFRIC 23 is based on IFRIC 23 Uncertainty over Income Tax Treatments as issued by the IASB.

The IFRS Interpretations Committee (the Committee) received a question about when entities should recognise a current tax asset if tax laws require entities to make payments in respect of a disputed tax treatment. The entity in question intended to appeal a tax ruling.

IAS 12 Income Taxes includes requirements on recognition and measurement of tax assets and liabilities, but it does not specify how to reflect uncertainty. The Committee noted that entities have applied diverse reporting methods in this case.

The Committee then developed IFRIC 23 to address how to reflect uncertainty in accounting for income taxes.

The interpretation is effective for annual periods beginning on or after 1 January 2019 with early application permitted.