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30 Jul. 2020

Amendments to Australian Accounting Standards – Insurance Contracts

To help insurers implement AASB 17 Insurance Contracts, including deferring its effective date by two years, the AASB has issued AASB 2020-5 Amendments to Australian Accounting Standards – Insurance Contracts.

The amendments to AASB 17 aim to:

  • reduce the costs of applying AASB 17 by simplifying some of its requirements;
  • make an entity’s financial performance relating to insurance contracts easier to explain; and  
  • ease the transition to AASB 17 by deferring its effective date to annual periods beginning on or after 1 January 2023 instead of 1 January 2021 and by providing additional optional relief to reduce the complexity in applying AASB 17 for the first time.

Amendments to AASB 4 Insurance Contracts permit eligible insurers to continue to apply AASB 139 Financial Instruments: Recognition and Measurement until they are required to apply AASB 9 Financial Instruments alongside AASB 17.

AASB 2020-5 applies to annual periods beginning on or after 1 January 2021, which was the original mandatory effective date of AASB 17. Earlier application is permitted