Insights into PFRS 17 - Subsequent measurement
PFRS 17 ‘Insurance Contracts’ (PFRS 17 or the Standard) establishes a principle-based framework for the recognition, measurement, presentation and disclosure of insurance contracts, based on a current fulfilment value approach. Insurance liabilities are measured as the sum of the present value of future cash flows, an explicit risk adjustment for non-financial risk, and the contractual service margin (CSM) representing unearned profit.
The Standard introduces a systematic basis for profit recognition over the coverage period, reflecting the transfer of insurance services, and requires entities to update assumptions at each reporting date. As a result, PFRS 17 enhances consistency, transparency and comparability of financial reporting, while significantly increasing the complexity of measurement and disclosure requirements.
The articles in our ‘Insights into PFRS 17’ series explain the key features of the Standard and provide insights into their application and impact. This article succinctly explains the subsequent measurement of insurance liabilities under PFRS 17.
The full publication is accessible and downloadable below.
The previous release in this series, which provide foundational discussions on earlier steps and key concepts under PFRS 17, are available below:
