# Commission Regulation (EU) 2017/1988 of 3 November 2017 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard 4 (Text with EEA relevance) (revoked) EU Regulation 2017/1988 · adopted 3 November 2017 Commission Regulation (EU) 2017/1988 of 3 November 2017 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard 4 (Text with EEA relevance) PDFs: Printed copy https://openlegislation.uk/eu-regulation-2017-1988/pdf/eur_20171988_adopted_en.pdf ## Introductory text Commission Regulation (EU) 2017/1988 of 3 November 2017 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard 4 (Text with EEA relevance) (revoked) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Applying IFRS 9 Financial Instruments with IFRS 4 (Amendments to IFRS 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Amendments to IFRS 4 Insurance Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## SCOPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3 This IFRS does not address other aspects of accounting by insurers, such as accounting for financial assets held by insurers and financial liabilities issued by insurers (see IAS 32 Financial Instruments: Presentation, IFRS 7 and IFRS 9 Financial Instruments), except: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5 For ease of reference, this IFRS describes any entity that issues an insurance contract as an insurer, whether or not the issuer is regarded as an insurer for legal or supervisory purposes. All references in paragraphs 3(a)–3(b), 20A–20Q, 35B–35N, 39B–39M and 46–49 to an insurer shall be read as also referring to an issuer of a financial instrument that contains a discretionary participation feature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## RECOGNITION AND MEASUREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Temporary exemption from IFRS 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20A IFRS 9 addresses the accounting for financial instruments and is effective for annual periods beginning on or after 1 January 2018. However, for an insurer that meets the criteria in paragraph 20B, this IFRS provides a temporary exemption that permits, but does not require, the insurer to apply IAS 39 Financial Instruments: Recognition and Measurement rather than IFRS 9 for annual periods beginning before 1 January 2021. An insurer that applies the temporary exemption from IFRS 9 shall: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20B An insurer may apply the temporary exemption from IFRS 9 if, and only if: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20D An insurer's activities are predominantly connected with insurance if, and only if: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20E For the purposes of applying paragraph 20D(b), liabilities connected with insurance comprise: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20F In assessing whether it engages in a significant activity unconnected with insurance for the purposes of applying paragraph 20D(b)(ii), an insurer shall consider: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20G Paragraph 20B(b) requires an entity to assess whether it qualifies for the temporary exemption from IFRS 9 at its annual reporting date that immediately precedes 1 April 2016. After that date: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20H For the purposes of applying paragraph 20G, a change in an entity's activities is a change that: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20I A change in an entity's activities, as described in paragraph 20H, is expected to be very infrequent. The following are not changes in an entity's activities for the purposes of applying paragraph 20G: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## First-time adopter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Temporary exemption from specific requirements in IAS 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20O Paragraphs 35–36 of IAS 28 Investments in Associates and Joint Ventures require an entity to apply uniform accounting policies when using the equity method. Nevertheless, for annual periods beginning before 1 January 2021, an entity is permitted, but not required, to retain the relevant accounting policies applied by the associate or joint venture as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20P When an entity uses the equity method to account for its investment in an associate or joint venture: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20Q . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Discretionary participation features in financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## PRESENTATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## The overlay approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35B An insurer is permitted, but not required, to apply the overlay approach to designated financial assets. An insurer that applies the overlay approach shall: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35C An insurer may elect to apply the overlay approach described in paragraph 35B only when it first applies IFRS 9, including when it first applies IFRS 9 after previously applying: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35D An insurer shall present the amount reclassified between profit or loss and other comprehensive income applying the overlay approach: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35E A financial asset is eligible for designation for the overlay approach if, and only if, the following criteria are met: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35F An insurer may designate an eligible financial asset for the overlay approach when it elects to apply the overlay approach (see paragraph 35C). Subsequently, it may designate an eligible financial asset for the overlay approach when, and only when: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35H When relevant, for the purposes of applying the overlay approach to a newly designated financial asset applying paragraph 35F(b): . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35I An entity shall continue to apply the overlay approach to a designated financial asset until that financial asset is derecognised. However, an entity: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Interaction with other requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## First-time adopter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35N If a first-time adopter elects to apply the overlay approach, it shall restate comparative information to reflect the overlay approach if, and only if, it restates comparative information to comply with IFRS 9 (see paragraphs E1–E2 of IFRS 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Disclosures about the temporary exemption from IFRS 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 39B An insurer that elects to apply the temporary exemption from IFRS 9 shall disclose information to enable users of financial statements: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 39C To comply with paragraph 39B(a), an insurer shall disclose the fact that it is applying the temporary exemption from IFRS 9 and how the insurer concluded on the date specified in paragraph 20B(b) that it qualifies for the temporary exemption from IFRS 9, including: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 39D If, applying paragraph 20G(a), an entity concludes that its activities are no longer predominantly connected with insurance, it shall disclose the following information in each reporting period before it begins to apply IFRS 9: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 39E To comply with paragraph 39B(b), an insurer shall disclose the fair value at the end of the reporting period and the amount of change in the fair value during that period for the following two groups of financial assets separately: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 39F When disclosing the information in paragraph 39E, the insurer: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 39G To comply with paragraph 39B(b), an insurer shall disclose information about the credit risk exposure, including significant credit risk concentrations, inherent in the financial assets described in paragraph 39E(a). At a minimum, an insurer shall disclose the following information for those financial assets at the end of the reporting period: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 39H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 39I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 39J If an entity applied the temporary exemption from IFRS 9 when accounting for its investment in an associate or joint venture using the equity method (for example, see paragraph 20O(a)), the entity shall disclose the following, in addition to the information required by IFRS 12 Disclosure of Interests in Other Entities: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Disclosures about the overlay approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 39K An insurer that applies the overlay approach shall disclose information to enable users of financial statements to understand: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 39L To comply with paragraph 39K, an insurer shall disclose: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 39M If an entity applied the overlay approach when accounting for its investment in an associate or joint venture using the equity method, the entity shall disclose the following, in addition to the information required by IFRS 12: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## EFFECTIVE DATE AND TRANSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Applying IFRS 4 with IFRS 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Temporary exemption from IFRS 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## The overlay approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 49 An entity that elects to apply the overlay approach shall: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- Source: https://www.legislation.gov.uk/eur/2017/1988 (the official version) Page: https://openlegislation.uk/eu-regulation-2017-1988 Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.