Written by : Rajiv Singh
A Chartered Accountant in UK with 15+ years of experience in FinTech Consulting, Accounting & International Taxation. I enjoy being a Social, Foodie and Father of two young children, reachable at linktr.ee/RajivSingh.
This is in continuation of Article from Linkedin, to include more detail informations..
Parallel to IFRS 4, IFRS 17 concentrates on the various types of contracts instead of different entities. This, in turn, means that the new model applies to all entities, despite insurance entities or not. Other standards for products that do not come under insurance contracts are also pertinent to the insurers. Suppose any entity is initiating IFRS to its contracts. In that case, the general principle is that it should be applied to the insurance or reinsurance contracts that it allots or to the reinsurance contracts that it retains.
The ways in which you handle data – harnessing, analyzing, and using data-will alter under the conditions made by IFRS 17. There is a requirement for very meticulously detailed data-informed reports on each of the insurance agreements. Prior to this, most contracts asked for the calculation of the contractual service margin (CSM) that included all the attuned risks, discounted, future cash incomes, and investment components.
Data interpretation using traditional systems is often contaminated with other pieces of information and is then transformed, evaluated, and used in different reports. Data lineage enables you to trace the data to identify its source and the changes that impacted the data, where these changes have been made, and why it is modified. The golden ticket of IFRS 17 is that it allows you to do the data lineage effectively without errors and delay. It automatizes how you handle the data. It will be difficult to manage data manually, and you may require other BI groups to do it.
These are some of the few changes and impacts that IFRS can bring universally to the accounting model. Managing and adapting to the changes is quite a complex task, but not with Gotaxfile. Gotaxfile provides you assistance with the ever-changing financial framework. Our expert accountants understand the intricacies of IFRS and identify all the modifications that should be bought into your platform. So pull yourselves together to unlock the new face of IFRS17.
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