9911796707
TMI BlogCompanies (Indian Accounting Standards) Amendment Rules, 2024.X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraph D4, and after paragraph B12 added a heading and paragraph B13. An entity shall apply those amendments when it applies Ind AS 117. (ii) in Appendix B, (a) in paragraph B1, for item (h), the following item shall be substituted, namely: (h) insurance contracts (paragraph B13); and (b) for paragraph B13, the following paragraph shall be substituted, namely: Insurance contracts B13 An entity shall apply the transition provisions in paragraphs C1 C24 and C28 in Appendix C of Ind AS 117 to contracts within the scope of Ind AS 117. The references in those paragraphs in Ind AS 117 to the transition date shall be read as the date of transition to Ind ASs. (iii) in Appendix D, (a) in paragraph D1, item (b) shall be omitted; (b) paragraph D4 along with its heading shall be omitted. (iv) in Appendix 1, (a) for paragraph 12, following paragraph shall be substituted, namely: 12. The following paragraph numbers appear as deleted in IFRS 1. In order to maintain consistency with paragraph numbers of IFRS 1, the paragraph numbers are retained in Ind AS 101: (i) Paragraph 19 (ii) Paragraph D1(b) (iii) Paragraph D1(e) (iv) Paragraph D1(o) (v) Paragraph D4 (vi) Paragraphs D9A and D9C (vii) Parag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bargain purchase might happen, for example, in a business combination that is a forced sale in which the seller is acting under compulsion. However, the recognition or measurement exceptions for particular items discussed in paragraphs 22-31A may also result in recognizing a gain (or change the amount of a recognised gain) on a bargain purchase. (vi) for paragraph 64N, the following paragraph shall be substituted, namely: 64N. Ind AS 117 amended paragraphs 17, 20, 21, 35 and B63, and after paragraph 31 added a heading and paragraph 31A. An entity shall apply the amendments to paragraph 17 to business combinations with an acquisition date after the date of initial application of Ind AS 117. An entity shall apply the other amendments when it applies Ind AS 117. (vii) in Appendix B, in paragraph B63, for item (b), the following item shall be substituted, namely, (b) (Refer Appendix 1) (viii) in Appendix 1, (a) for paragraph 5, the following paragraph shall be substituted, namely: 5. Paragraphs 64-64J and 64L of IFRS 3 related to effective date have not been included in Ind AS 103 as these are not relevant in Indian context. However, in order to maintain consistency with paragraph num ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eparated from contracts within the scope of Ind AS 117, if Ind AS 117 requires such separation, unless the separated investment component is an investment contract with discretionary participation features. (iii) an issuer s rights and obligations arising under insurance contracts that meet the definition of financial guarantee contracts, if the issuer applies Ind AS 109 in recognising and measuring the contracts. However, the issuer shall apply Ind AS 117 if the issuer elects, in accordance with paragraph 7(e) of Ind AS 117, to apply Ind AS 117 in recognising and measuring the contracts. (iv) an entity s rights and obligations that are financial instruments arising under credit card contracts, or similar contracts that provide credit or payment arrangements, that an entity issues that meet the definition of an insurance contract if the entity applies Ind AS 109 to those rights and obligations in accordance with paragraph 7(h) of Ind AS 117 and paragraph 2.1(e)(iv) of Ind AS 109. (v) an entity s rights and obligations that are financial instruments arising under insurance contracts that an entity issues that limit the compensation for insured events to the amount otherwise required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following item shall be substituted, namely: (e) rights and obligations arising under an insurance contract as defined in Ind AS 117, Insurance Contracts, or an investment contract with discretionary participation features within the scope of Ind AS 117. However, this Standard applies to: (i) derivatives that are embedded in contracts within the scope of Ind AS 117, if the derivatives are not themselves contracts within the scope of Ind AS 117. (ii) investment components that are separated from contracts within the scope of Ind AS 117, if Ind AS 117 requires such separation, unless the separated investment component is an investment contract with discretionary participation features within the scope of Ind AS 117. (iii) an issuer s rights and obligations under insurance contracts that meet the definition of a financial guarantee contract. However, if an issuer of financial guarantee contracts has previously asserted explicitly that it regards such contracts as insurance contracts and has used accounting that is applicable to insurance contracts, the issuer may elect to apply either this Standard or Ind AS 117 to such financial guarantee contracts (see paragraphs B2.5 B2.6). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (See Ind AS 117 for terms used in this paragraph that are defined in that Standard.) (iii) for paragraph 7.1.6, the following paragraph shall be substituted, namely: 7.1.6 Ind AS 117 amended paragraphs 2.1, B2.1, B2.4, B2.5 and B4.1.30, and added paragraphs 3.3.5, 7.2.36-7.2.42. An entity shall apply those amendments when it applies Ind AS 117. (iv) for paragraphs 7.2.36-7.2.42, the following paragraphs shall be substituted, namely: Transition for Ind AS 117 7.2.36 An entity shall apply the amendments to Ind AS 109 made by Ind AS 117 retrospectively in accordance with Ind AS 8, except as specified in paragraphs 7.2.37 7.2.42. 7.2.37 An entity that first applies Ind AS 117 at the same time it first applies this Standard shall apply paragraphs 7.2.1 7.2.28 instead of paragraphs 7.2.38 7.2.42. 7.2.38 An entity that first applies Ind AS 117 after it first applies this Standard shall apply paragraphs 7.2.39 7.2.42. The entity shall also apply the other transition requirements in this Standard necessary for applying these amendments. For that purpose, references to the date of initial application shall be read as referring to the beginning of the reporting period in which an entity first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined immediately before applying these amendments; (b) the new measurement category and carrying amount determined after applying these amendments; (c) the carrying amount of any financial liabilities in the balance sheet that were previously designated as measured at fair value through profit or loss but are no longer so designated; and (d) the reasons for any designation or de-designation of financial liabilities as measured at fair value through profit or loss. (v) in Appendix B, in paragraphs B2.1 and B2.4, for the words and figures Ind AS 104 , the words and figures Ind AS 117 shall be substituted. (vi) in paragraph B2.5, for items (a) and (b), the following items shall be substituted, namely: (a) Although a financial guarantee contract meets the definition of an insurance contract in Ind AS 117 (see paragraph 7(e) of Ind AS 117) if the risk transferred is significant, the issuer applies this Standard. Nevertheless, if the issuer has previously asserted explicitly that it regards such contracts as insurance contracts and has used accounting that is applicable to insurance contracts, the issuer may elect to apply either this Standard or Ind AS 117 to such financial guaran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e paragraph numbers are retained in Ind AS 109. (b) paragraph 5 shall be omitted. (G) in Indian Accounting Standard (Ind AS) 115 , (i) in paragraph 5, for item (b), the following shall be substituted, namely:- (b) contracts within the scope of Ind AS 117, Insurance Contracts. However, an entity may choose to apply this Standard to insurance contracts that have as their primary purpose the provision of services for a fixed fee in accordance with paragraph 8 of Ind AS 117; (ii) in Appendix C, after paragraph C1B, the following shall be inserted, namely:- C1C Ind AS 117 amended paragraph 5. An entity shall apply that amendment when it applies Ind AS 117 . (H) after Indian Accounting Standard (Ind AS) 116 , the following Indian Accounting Standard (Ind AS) 117 shall be inserted, namely:- Indian Accounting Standard (Ind AS) 117 Insurance Contracts (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1. Ind AS 117 Insurance Contracts establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rranties provided by a manufacturer, dealer or retailer in connection with the sale of its goods or services to a customer (see Ind AS 115, Revenue from Contracts with Customers). (b) employers assets and liabilities from employee benefit plans (see Ind AS 19, Employee Benefits and Ind AS 102, Share-based Payment) and retirement benefit obligations reported by defined benefit retirement plans. (c) contractual rights or contractual obligations contingent on the future use of, or the right to use, a non-financial item (for example, some licence fees, royalties, variable and other contingent lease payments and similar items: see Ind AS 115, Ind AS 38, Intangible Assets and Ind AS 116, Leases). (d) residual value guarantees provided by a manufacturer, dealer or retailer and a lessee s residual value guarantees when they are embedded in a lease (see Ind AS 115 and Ind AS 116). (e) financial guarantee contracts, unless the issuer has previously asserted explicitly that it regards such contracts as insurance contracts and has used accounting applicable to insurance contracts. The issuer shall choose to apply either Ind AS 117 or Ind AS 32, Financial Instruments: Presentation, Ind AS 107, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f insurance contracts, and the choice for each portfolio is irrevocable. Combination of insurance contracts 9. A set or series of insurance contracts with the same or a related counterparty may achieve, or be designed to achieve, an overall commercial effect. In order to report the substance of such contracts, it may be necessary to treat the set or series of contracts as a whole. For example, if the rights or obligations in one contract do nothing other than entirely negate the rights or obligations in another contract entered into at the same time with the same counterparty, the combined effect is that no rights or obligations exist. Separating components from an insurance contract (paragraphs B31 B35) 10. An insurance contract may contain one or more components that would be within the scope of another Standard if they were separate contracts. For example, an insurance contract may include an investment component or a component for services other than insurance contract services (or both). An entity shall apply paragraphs 11 13 to identify and account for the components of the contract. 11. An entity shall: (a) apply Ind AS 109 to determine whether there is an embedded derivativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e portfolio if they are managed together. Contracts in different product lines (for example single premium fixed annuities compared with regular term life assurance) would not be expected to have similar risks and hence would be expected to be in different portfolios. 15. Paragraphs 16 24 apply to insurance contracts issued. The requirements for the level of aggregation of reinsurance contracts held are set out in paragraph 61. 16. An entity shall divide a portfolio of insurance contracts issued into a minimum of: (a) a group of contracts that are onerous at initial recognition, if any; (b) a group of contracts that at initial recognition have no significant possibility of becoming onerous subsequently, if any; and (c) a group of the remaining contracts in the portfolio, if any. 17. If an entity has reasonable and supportable information to conclude that a set of contracts will all be in the same group applying paragraph 16, it may measure the set of contracts to determine if the contracts are onerous (see paragraph 47) and assess the set of contracts to determine if the contracts have no significant possibility of becoming onerous subsequently (see paragraph 19). If the entity doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different possibilities of contracts becoming onerous after initial recognition; and (b) more than one group of contracts that are onerous at initial recognition if the entity s internal reporting provides information at a more detailed level about the extent to which the contracts are onerous. 22. An entity shall not include contracts issued more than one year apart in the same group. To achieve this the entity shall, if necessary, further divide the groups described in paragraphs 16 21. 23. A group of insurance contracts shall comprise a single contract if that is the result of applying paragraphs 14 22. 24. An entity shall apply the recognition and measurement requirements of Ind AS 117 to the groups of contracts determined by applying paragraphs 14 23. An entity shall establish the groups at initial recognition and add contracts to the groups applying paragraph 28. The entity shall not reassess the composition of the groups subsequently. To measure a group of contracts, an entity may estimate the fulfilment cash flows at a higher level of aggregation than the group or portfolio, provided the entity is able to include the appropriate fulfilment cash flows in the measurement of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity shall derecognise an asset for insurance acquisition cash flows when the insurance acquisition cash flows are included in the measurement of the related group of insurance contracts applying paragraph 38(c)(i) or paragraph 55(a)(iii). 28D If paragraph 28 applies, an entity shall apply paragraphs 28B‒28C in accordance with paragraph B35C. 28E At the end of each reporting period, an entity shall assess the recoverability of an asset for insurance acquisition cash flows if facts and circumstances indicate the asset may be impaired (see paragraph B35D). If an entity identifies an impairment loss, the entity shall adjust the carrying amount of the asset and recognise the impairment loss in profit or loss. 28F An entity shall recognise in profit or loss a reversal of some or all of an impairment loss previously recognised applying paragraph 28E and increase the carrying amount of the asset, to the extent that the impairment conditions no longer exist or have improved. Measurement (paragraphs B36 B119F) 29. An entity shall apply paragraphs 30 52 to all groups of insurance contracts within the scope of Ind AS 117, with the following exceptions: (a) for groups of insurance contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs B37 B41). To do this, an entity shall estimate the expected value (ie the probability-weighted mean) of the full range of possible outcomes. (b) reflect the perspective of the entity, provided that the estimates of any relevant market variables are consistent with observable market prices for those variables (see paragraphs B42 B53). (c) be current the estimates shall reflect conditions existing at the measurement date, including assumptions at that date about the future (see paragraphs B54 B60). (d) be explicit the entity shall estimate the adjustment for non-financial risk separately from the other estimates (see paragraph B90). The entity also shall estimate the cash flows separately from the adjustment for the time value of money and financial risk, unless the most appropriate measurement technique combines these estimates (see paragraph B46). 34. Cash flows are within the boundary of an insurance contract if they arise from substantive rights and obligations that exist during the reporting period in which the entity can compel the policyholder to pay the premiums or in which the entity has a substantive obligation to provide the policyholder with insurance contract services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urance contract services in the future. An entity shall measure the contractual service margin on initial recognition of a group of insurance contracts at an amount that, unless paragraph 47 (on onerous contracts) or paragraph B123A (on insurance revenue relating to paragraph 38(c)(ii)) applies, results in no income or expenses arising from: (a) the initial recognition of an amount for the fulfilment cash flows, measured by applying paragraphs 32 37; (b) any cash flows arising from the contracts in the group at that date; (c) the derecognition at the date of initial recognition of: (i) any asset for insurance acquisition cash flows applying paragraph 28C; and (ii) any other asset or liability previously recognised for cash flows related to the group of contracts as specified in paragraph B66A. 39. For insurance contracts acquired in a transfer of insurance contracts or in a business combination within the scope of Ind AS 103, an entity shall apply paragraph 38 in accordance with paragraphs B93 B95F. Subsequent measurement 40. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of: (a) the liability for remaining coverage compri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraph B72(b); (c) the changes in fulfilment cash flows relating to future service as specified in paragraphs B96 B100, except to the extent that: (i) such increases in the fulfilment cash flows exceed the carrying amount of the contractual service margin, giving rise to a loss (see paragraph 48(a)); or (ii) such decreases in the fulfilment cash flows are allocated to the loss component of the liability for remaining coverage applying paragraph 50(b). (d) the effect of any currency exchange differences on the contractual service margin; and (e) the amount recognised as insurance revenue because of the transfer of insurance contract services in the period, determined by the allocation of the contractual service margin remaining at the end of the reporting period (before any allocation) over the current and remaining coverage period applying paragraph B119. 45. For insurance contracts with direct participation features (see paragraphs B101 B118), the carrying amount of the contractual service margin of a group of contracts at the end of the reporting period equals the carrying amount at the start of the reporting period adjusted for the amounts specified in subparagraphs (a) (e) bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract at the date of initial recognition in total are a net outflow. Applying paragraph 16(a), an entity shall group such contracts separately from contracts that are not onerous. To the extent that paragraph 17 applies, an entity may identify the group of onerous contracts by measuring a set of contracts rather than individual contracts. An entity shall recognise a loss in profit or loss for the net outflow for the group of onerous contracts, resulting in the carrying amount of the liability for the group being equal to the fulfilment cash flows and the contractual service margin of the group being zero. 48. A group of insurance contracts becomes onerous (or more onerous) on subsequent measurement if the following amounts exceed the carrying amount of the contractual service margin: (a) unfavourable changes relating to future service in the fulfilment cash flows allocated to the group arising from changes in estimates of future cash flows and the risk adjustment for non-financial risk; and (b) for a group of insurance contracts with direct participation features, the decrease in the amount of the entity s share of the fair value of the underlying items. Applying paragraphs 44(c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the group: (a) the entity reasonably expects that such simplification would produce a measurement of the liability for remaining coverage for the group that would not differ materially from the one that would be produced applying the requirements in paragraphs 32 52; or (b) the coverage period of each contract in the group (including insurance contract services arising from all premiums within the contract boundary determined at that date applying paragraph 34) is one year or less. 54. The criterion in paragraph 53(a) is not met if at the inception of the group an entity expects significant variability in the fulfilment cash flows that would affect the measurement of the liability for remaining coverage during the period before a claim is incurred. Variability in the fulfilment cash flows increases with, for example: (a) the extent of future cash flows relating to any derivatives embedded in the contracts; and (b) the length of the coverage period of the group of contracts. 55. Using the premium allocation approach, an entity shall measure the liability for remaining coverage as follows: (a) on initial recognition, the carrying amount of the liability is: (i) the premiums, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, if, in applying paragraph 59(b), the entity does not adjust the liability for incurred claims for the time value of money and the effect of financial risk, it shall not include in the fulfilment cash flows any such adjustment. 58. To the extent that the fulfilment cash flows described in paragraph 57(b) exceed the carrying amount described in paragraph 57(a), the entity shall recognise a loss in profit or loss and increase the liability for remaining coverage. 59. In applying the premium allocation approach, an entity: (a) may choose to recognise any insurance acquisition cash flows as expenses when it incurs those costs, provided that the coverage period of each contract in the group at initial recognition is no more than one year. (b) shall measure the liability for incurred claims for the group of insurance contracts at the fulfilment cash flows relating to incurred claims, applying paragraphs 33 37 and B36 B92. However, the entity is not required to adjust future cash flows for the time value of money and the effect of financial risk if those cash flows are expected to be paid or received in one year or less from the date the claims are incurred. Reinsurance contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the contractual service margin on initial recognition are modified to reflect the fact that for a group of reinsurance contracts held there is no unearned profit but instead a net cost or net gain on purchasing the reinsurance. Hence, unless paragraph 65A applies, on initial recognition the entity shall recognise any net cost or net gain on purchasing the group of reinsurance contracts held as a contractual service margin measured at an amount equal to the sum of: (a) the fulfilment cash flows; (b) the amount derecognised at that date of any asset or liability previously recognised for cash flows related to the group of reinsurance contracts held; (c) any cash flows arising at that date; and (d) any income recognised in profit or loss applying paragraph 66A. 65A If the net cost of purchasing reinsurance coverage relates to events that occurred before the purchase of the group of reinsurance contracts held, notwithstanding the requirements of paragraph B5, the entity shall recognise such a cost immediately in profit or loss as an expense. 66. Instead of applying paragraph 44, an entity shall measure the contractual service margin at the end of the reporting period for a group of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and are consequently excluded from the allocation of premiums paid to the reinsurer (see paragraph B119F). 67. Changes in the fulfilment cash flows that result from changes in the risk of non-performance by the issuer of a reinsurance contract held do not relate to future service and shall not adjust the contractual service margin. 68. Reinsurance contracts held cannot be onerous. Accordingly, the requirements of paragraphs 47 52 do not apply. Premium allocation approach for reinsurance contracts held 69. An entity may use the premium allocation approach set out in paragraphs 55 56 and 59 (adapted to reflect the features of reinsurance contracts held that differ from insurance contracts issued, for example the generation of expenses or reduction in expenses rather than revenue) to simplify the measurement of a group of reinsurance contracts held, if at the inception of the group: (a) the entity reasonably expects the resulting measurement would not differ materially from the result of applying the requirements in paragraphs 63 68; or (b) the coverage period of each contract in the group of reinsurance contracts held (including insurance coverage from all premiums within the contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other applicable Standards if, and only if, any of the conditions in (a) (c) are satisfied. The exercise of a right included in the terms of a contract is not a modification. The conditions are that: (a) if the modified terms had been included at contract inception: (i) the modified contract would have been excluded from the scope of Ind AS 117, applying paragraphs 3 8A; (ii) an entity would have separated different components from the host insurance contract applying paragraphs 10 13, resulting in a different insurance contract to which Ind AS 117 would have applied; (iii) the modified contract would have had a substantially different contract boundary applying paragraph 34; or (iv) the modified contract would have been included in a different group of contracts applying paragraphs 14 24. (b) the original contract met the definition of an insurance contract with direct participation features, but the modified contract no longer meets that definition, or vice versa; or (c) the entity applied the premium allocation approach in paragraphs 53 59 or paragraphs 69 70 to the original contract, but the modifications mean that the contract no longer meets the eligibility criteria for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) the change in the carrying amount of the group of insurance contracts resulting from the derecognition of the contract, applying paragraph 76(a). (ii) the premium charged by the third party. (iii) the premium the entity would have charged had it entered into a contract with equivalent terms as the new contract at the date of the contract modification, less any additional premium charged for the modification. (b) measure the new contract recognised applying paragraph 72 assuming that the entity received the premium described in (a)(iii) at the date of the modification. Presentation in the balance sheet 78. An entity shall present separately in the balance sheet the carrying amount of portfolios of: (a) insurance contracts issued that are assets; (b) insurance contracts issued that are liabilities; (c) reinsurance contracts held that are assets; and (d) reinsurance contracts held that are liabilities. 79. An entity shall include any assets for insurance acquisition cash flows recognised applying paragraph 28B in the carrying amount of the related portfolios of insurance contracts issued, and any assets or liabilities for cash flows related to portfolios of reinsurance contracts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the reinsurer and an allocation of the premiums paid, it shall: (a) treat reinsurance cash flows that are contingent on claims on the underlying contracts as part of the claims that are expected to be reimbursed under the reinsurance contract held; (b) treat amounts from the reinsurer that it expects to receive that are not contingent on claims of the underlying contracts (for example, some types of ceding commissions) as a reduction in the premiums to be paid to the reinsurer; (ba) treat amounts recognised relating to recovery of losses applying paragraphs 66(c)(i)‒(ii) and 66A‒66B as amounts recovered from the reinsurer; and (c) not present the allocation of premiums paid as a reduction in revenue. Insurance finance income or expenses (see paragraphs B128 B136) 87 . Insurance finance income or expenses comprises the change in the carrying amount of the group of insurance contracts arising from: (a) the effect of the time value of money and changes in the time value of money; and (b) the effect of financial risk and changes in financial risk; but (c) excluding any such changes for groups of insurance contracts with direct participation features that would adjust t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve income because the entity chose the accounting policy set out in paragraph 89(b). 92. Paragraph 30 requires an entity to treat an insurance contract as a monetary item under Ind AS 21 for the purpose of translating foreign exchange items into the entity s functional currency. An entity includes exchange differences on changes in the carrying amount of groups of insurance contracts in the statement of profit or loss, unless they relate to changes in the carrying amount of groups of insurance contracts included in other comprehensive income applying paragraph 90, in which case they shall be included in other comprehensive income. Disclosure The objective of the disclosure requirements is for an entity to disclose information in the notes that, together with the information provided in the balance sheet, statement(s) of profit and loss and statement of cash flows, gives a basis for users of financial statements to assess the effect that contracts within the scope of Ind AS 117 have on the entity s financial position, financial performance and cash flows. To achieve that objective, an entity shall disclose qualitative and quantitative information about: (a) the amounts recognised in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contracts held that differ from insurance contracts issued; for example, the generation of expenses or reduction in expenses rather than revenue. 99. An entity shall provide enough information in the reconciliations to enable users of financial statements to identify changes from cash flows and amounts that are recognised in the statement of profit and loss. To comply with this requirement, an entity shall: (a) disclose, in a table, the reconciliations set out in paragraphs 100 105B; and (b) for each reconciliation, present the net carrying amounts at the beginning and at the end of the period, disaggregated into a total for portfolios of contracts that are assets and a total for portfolios of contracts that are liabilities, that equal the amounts presented in the balance sheet applying paragraph 78. 100. An entity shall disclose reconciliations from the opening to the closing balances separately for each of: (a) the net liabilities (or assets) for the remaining coverage component, excluding any loss component. (b) any loss component (see paragraphs 47 52 and 57 58). (c) the liabilities for incurred claims. For insurance contracts to which the premium allocation approach describe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial risk that does not relate to future service or past service; and (iii) experience adjustments (see paragraphs B97(c) and B113(a)), excluding amounts relating to the risk adjustment for non-financial risk included in (ii). (c) changes that relate to past service, ie changes in fulfilment cash flows relating to incurred claims (see paragraphs B97(b) and B113(a)). 105. To complete the reconciliations in paragraphs 100 101, an entity shall also disclose separately each of the following amounts not related to services provided in the period, if applicable: (a) cash flows in the period, including: (i) premiums received for insurance contracts issued (or paid for reinsurance contracts held); (ii) insurance acquisition cash flows; and (iii) incurred claims paid and other insurance service expenses paid for insurance contracts issued (or recovered under reinsurance contracts held), excluding insurance acquisition cash flows. (b) the effect of changes in the risk of non-performance by the issuer of reinsurance contracts held; (c) insurance finance income or expenses; and (d) any additional line items that may be necessary to understand the change in the net carrying amount of the insur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther entities in transfers of insurance contracts or business combinations; and (b) groups of contracts that are onerous. 109. For insurance contracts other than those to which the premium allocation approach described in paragraphs 53 59 or 69 70A has been applied, an entity shall disclose when it expects to recognise the contractual service margin remaining at the end of the reporting period in profit or loss quantitatively, in appropriate time bands. Such information shall be provided separately for insurance contracts issued and reinsurance contracts held. 109A An entity shall disclose quantitatively, in appropriate time bands, when it expects to derecognise an asset for insurance acquisition cash flows applying paragraph 28C. Insurance finance income or expenses 110. An entity shall disclose and explain the total amount of insurance finance income or expenses in the reporting period. In particular, an entity shall explain the relationship between insurance finance income or expenses and the investment return on its assets, to enable users of its financial statements to evaluate the sources of finance income or expenses recognised in profit or loss and other comprehensive incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come applies paragraphs C18(b), C19(b), C24(b) and C24(c) to determine the cumulative difference between the insurance finance income or expenses that would have been recognised in profit or loss and the total insurance finance income or expenses at the transition date for the groups of insurance contracts to which the disaggregation applies. For all periods in which amounts determined applying these paragraphs exist, the entity shall disclose a reconciliation from the opening to the closing balance of the cumulative amounts included in other comprehensive income for financial assets measured at fair value through other comprehensive income related to the groups of insurance contracts. The reconciliation shall include, for example, gains or losses recognised in other comprehensive income in the period and gains or losses previously recognised in other comprehensive income in previous periods reclassified in the period to profit or loss. Significant judgements in applying Ind AS 117 117. An entity shall disclose the significant judgements and changes in judgements made in applying Ind AS 117. Specifically, an entity shall disclose the inputs, assumptions and estimation techniques us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom contracts within the scope of Ind AS 117 121. An entity shall disclose information that enables users of its financial statements to evaluate the nature, amount, timing and uncertainty of future cash flows that arise from contracts within the scope of Ind AS 117. Paragraphs 122 132 contain requirements for disclosures that would normally be necessary to meet this requirement. 122. These disclosures focus on the insurance and financial risks that arise from insurance contracts and how they have been managed. Financial risks typically include, but are not limited to, credit risk, liquidity risk and market risk. 123. If the information disclosed about an entity s exposure to risk at the end of the reporting period is not representative of its exposure to risk during the period, the entity shall disclose that fact, the reason why the period-end exposure is not representative, and further information that is representative of its risk exposure during the period. 124. For each type of risk arising from contracts within the scope of Ind AS 117, an entity shall disclose: (a) the exposures to risks and how they arise; (b) the entity s objectives, policies and processes for managing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itivities to changes in risk variables arising from insurance contracts and those arising from financial assets held by the entity. (b) the methods and assumptions used in preparing the sensitivity analysis; and (c) changes from the previous period in the methods and assumptions used in preparing the sensitivity analysis, and the reasons for such changes. 129. If an entity prepares a sensitivity analysis that shows how amounts different from those specified in paragraph 128(a) are affected by changes in risk variables and uses that sensitivity analysis to manage risks arising from contracts within the scope of Ind AS 117, it may use that sensitivity analysis in place of the analysis specified in paragraph 128(a). The entity shall also disclose: (a) an explanation of the method used in preparing such a sensitivity analysis and of the main parameters and assumptions underlying the information provided; and (b) an explanation of the objective of the method used and of any limitations that may result in the information provided. Insurance risk claims development 130. An entity shall disclose actual claims compared with previous estimates of the undiscounted amount of the claims (ie cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17, Insurance Contracts. contractual service margin A component of the carrying amount of the asset or liability for a group of insurance contracts representing the unearned profit the entity will recognise as it provides insurance contract services under the insurance contracts in the group. coverage period The period during which the entity provides insurance contract services. This period includes the insurance contract services that relate to all premiums within the boundary of the insurance contract. experience adjustment A difference between: (a) for premium receipts (and any related cash flows such as insurance acquisition cash flows and insurance premium taxes) the estimate at the beginning of the period of the amounts expected in the period and the actual cash flows in the period; or (b) for insurance service expenses (excluding insurance acquisition expenses) the estimate at the beginning of the period of the amounts expected to be incurred in the period and the actual amounts incurred in the period. financial risk The risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, currency exchange rate, index of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the fair value returns on the underlying items; and (c) the entity expects a substantial proportion of any change in the amounts to be paid to the policyholder to vary with the change in fair value of the underlying items. insurance contract without direct participation features An insurance contract that is not an insurance contract with direct participation features. insurance risk Risk, other than financial risk, transferred from the holder of a contract to the issuer. insured event An uncertain future event covered by an insurance contract that creates insurance risk. investment component The amounts that an insurance contract requires the entity to repay to a policyholder in all circumstances, regardless of whether an insured event occurs. investment contract with discretionary A financial instrument that provides a particular investor with the contractual right to receive, as a supplement to an amount not subject to the discretion of the issuer, participation features additional amounts: (a) that are expected to be a significant portion of the total contractual benefits; (b) the timing or amount of which are contractually at the discretion of the issuer; and (c) that are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntity, or a specified subset of the net assets of the entity. Appendix B Application guidance This appendix is an integral part of Ind AS 117 Insurance Contracts. B1 This appendix provides guidance on the following: (a) definition of an insurance contract (see paragraphs B2 B30); (b) separation of components from an insurance contract (see paragraphs B31 B35); (ba) asset for insurance acquisition cash flows (see paragraphs B35A-B35D); (c) measurement (see paragraphs B36 B119F); (d) insurance revenue (see paragraphs B120 B127); (e) insurance finance income or expenses (see paragraphs B128 B136); and (f) interim financial statements (see paragraph B137). Definition of an insurance contract (Appendix A) B2 This section provides guidance on the definition of an insurance contract as specified in Appendix A. It addresses the following: (a) uncertain future event (see paragraphs B3 B5); (b) payments in kind (see paragraph B6); (c) the distinction between insurance risk and other risks (see paragraphs B7 B16); (d) significant insurance risk (see paragraphs B17 B23); (e) changes in the level of insurance risk (see paragraphs B24 B25); and (f) examples of insurance contracts (see paragraphs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial risk in Appendix A refers to financial and non-financial variables. Examples of non-financial variables not specific to a party to the contract include an index of earthquake losses in a particular region or temperatures in a particular city. Financial risk excludes risk from non-financial variables that are specific to a party to the contract, such as the occurrence or non-occurrence of a fire that damages or destroys an asset of that party. Furthermore, the risk of changes in the fair value of a nonfinancial asset is not a financial risk if the fair value reflects changes in the market prices for such assets (ie a financial variable) and the condition of a specific non-financial asset held by a party to a contract (ie a non-financial variable). For example, if a guarantee of the residual value of a specific car in which the policyholder has an insurable interest exposes the guarantor to the risk of changes in the car s physical condition, that risk is insurance risk, not financial risk. B9 Some contracts expose the issuer to financial risk in addition to significant insurance risk. For example, many life insurance contracts guarantee a minimum rate of return to policyholde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ariable correlated with the cash flows from an asset of the entity, the derivative is not an insurance contract because the payment is not conditional on whether the holder is adversely affected by a reduction in the cash flows from the asset. The definition of an insurance contract refers to an uncertain future event for which an adverse effect on the policyholder is a contractual precondition for payment. A contractual precondition does not require the entity to investigate whether the event actually caused an adverse effect, but it does permit the entity to deny the payment if it is not satisfied that the event did cause an adverse effect. B14 Lapse or persistency risk (the risk that the policyholder will cancel the contract earlier or later than the issuer had expected when pricing the contract) is not insurance risk because the resulting variability in the payment to the policyholder is not contingent on an uncertain future event that adversely affects the policyholder. Similarly, expense risk (ie the risk of unexpected increases in the administrative costs associated with the servicing of a contract, rather than in the costs associated with insured events) is not insurance ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in paragraph B18 are determined on a present-value basis. If an insurance contract requires payment when an event with uncertain timing occurs and if the payment is not adjusted for the time value of money, there may be scenarios in which the present value of the payment increases, even if its nominal value is fixed. An example is insurance that provides a fixed death benefit when the policyholder dies, with no expiry date for the cover (often referred to as whole-life insurance for a fixed amount). It is certain that the policyholder will die, but the date of death is uncertain. Payments may be made when an individual policyholder dies earlier than expected. Because those payments are not adjusted for the time value of money, significant insurance risk could exist even if there is no overall loss on the portfolio of contracts. Similarly, contractual terms that delay timely reimbursement to the policyholder can eliminate significant insurance risk. An entity shall use the discount rates required in paragraph 36 to determine the present value of the additional amounts. B21 The additional amounts described in paragraph B18 refer to the present value of amounts that exceed those that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h benefit is not significant (judged by reference to the contract itself rather than to an entire portfolio of contracts). As noted in paragraph B21(b), the waiver on death of cancellation or surrender charges is not included in this assessment if that waiver does not compensate the policyholder for a pre-existing risk. Similarly, an annuity contract that pays out regular sums for the rest of a policyholder s life is an insurance contract, unless the aggregate life-contingent payments are insignificant. Changes in the level of insurance risk B24 For some contracts, the transfer of insurance risk to the issuer occurs after a period of time. For example, consider a contract that provides a specified investment return and includes an option for the policyholder to use the proceeds of the investment on maturity to buy a life-contingent annuity at the same rates the entity charges other new annuitants at the time the policyholder exercises that option. Such a contract transfers insurance risk to the issuer only after the option is exercised, because the entity remains free to price the annuity on a basis that reflects the insurance risk that will be transferred to the entity at that tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly by a manufacturer, dealer or retailer are outside the scope of Ind AS 117 applying paragraph 7(a), and are instead within the scope of Ind AS 115 or Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets. (h) title insurance (insurance against the discovery of defects in the title to land or buildings that were not apparent when the insurance contract was issued). In this case, the insured event is the discovery of a defect in the title, not the defect itself. (i) travel insurance (compensation in cash or in kind to policyholders for losses suffered in advance of, or during, travel). (j) catastrophe bonds that provide for reduced payments of principal, interest or both, if a specified event adversely affects the issuer of the bond (unless the specified event does not create significant insurance risk; for example, if the event is a change in an interest rate or a foreign exchange rate). (k) insurance swaps and other contracts that require a payment depending on changes in climatic, geological or other physical variables that are specific to a party to the contract. B27 The following are examples of items that are not insurance contracts: (a) investment contracts th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a credit rating or a credit index or any other variable, provided that, in the case of a non-financial variable, the variable is not specific to a party to the contract. (f) credit-related guarantees that require payments even if the holder has not incurred a loss on the failure of the debtor to make payments when due; such contracts are accounted for applying Ind AS 109, Financial Instruments (see paragraph B29). (g) contracts that require a payment that depends on a climatic, geological or any other physical variable not specific to a party to the contract (commonly described as weather derivatives). (h) contracts that provide for reduced payments of principal, interest or both, that depend on a climatic, geological or any other physical variable, the effect of which is not specific to a party to the contract (commonly referred to as catastrophe bonds). B28 An entity shall apply other applicable Standards, such as Ind AS 109 and Ind AS 115, to the contracts described in paragraph B27. B29 The credit-related guarantees and credit insurance contracts discussed in paragraph B27(f) can have various legal forms, such as that of a guarantee, some types of letters of credit, a credit de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also present. Thus, if the lapse or maturity of one component in a contract causes the lapse or maturity of the other, the entity shall apply Ind AS 117 to account for the combined investment component and insurance component. Promises to transfer distinct goods or services other than insurance contract services (paragraph 12) B33 Paragraph 12 requires an entity to separate from an insurance contract a promise to transfer distinct goods or services other than insurance contract services to a policyholder. For the purpose of separation, an entity shall not consider activities that an entity must undertake to fulfil a contract unless the entity transfers a good or service other than insurance contract services to the policyholder as those activities occur. For example, an entity may need to perform various administrative tasks to set up a contract. The performance of those tasks does not transfer a service to the policyholder as the tasks are performed. B34 A good or service other than an insurance contract service promised to a policyholder is distinct if the policyholder can benefit from the good or service either on its own or together with other resources readily available to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontracts, determined applying paragraph 32(a). (b) when an entity allocates insurance acquisition cash flows to groups of insurance contracts applying paragraph B35A(a)(ii), the entity shall recognise an impairment loss in profit or loss and reduce the carrying amount of the related assets for insurance acquisition cash flows to the extent that: (i) the entity expects those insurance acquisition cash flows to exceed the net cash inflow for the expected renewals, determined applying paragraph 32(a); and (ii) the excess determined applying (b)(i) has not already been recognised as an impairment loss applying (a). Measurement (paragraphs 29 71) Estimates of future cash flows (paragraphs 33 35) B36 This section addresses: (a) unbiased use of all reasonable and supportable information available without undue cost or effort (see paragraphs B37 B41); (b) market variables and non-market variables (see paragraphs B42 B53); (c) using current estimates (see paragraphs B54 B60); and (d) cash flows within the contract boundary (see paragraphs B61 B71). Unbiased use of all reasonable and supportable information available without undue cost or effort (paragraph 33(a)) B37 The objective of estimat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be necessary to satisfy the measurement objective. B40 The scenarios developed shall include unbiased estimates of the probability of catastrophic losses under existing contracts. Those scenarios exclude possible claims under possible future contracts. B41 An entity shall estimate the probabilities and amounts of future payments under existing contracts on the basis of information obtained including: (a) information about claims already reported by policyholders. (b) other information about the known or estimated characteristics of the insurance contracts. (c) historical data about the entity s own experience, supplemented when necessary with historical data from other sources. Historical data is adjusted to reflect current conditions, for example, if: (i) the characteristics of the insured population differ (or will differ, for example, because of adverse selection) from those of the population that has been used as a basis for the historical data; (ii) there are indications that historical trends will not continue, that new trends will emerge or that economic, demographic and other changes may affect the cash flows that arise from the existing insurance contracts; or (iii) there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rice was wrong . B46 An important application of market variables is the notion of a replicating asset or a replicating portfolio of assets. A replicating asset is one whose cash flows exactly match, in all scenarios, the contractual cash flows of a group of insurance contracts in amount, timing and uncertainty. In some cases, a replicating asset may exist for some of the cash flows that arise from a group of insurance contracts. The fair value of that asset reflects both the expected present value of the cash flows from the asset and the risk associated with those cash flows. If a replicating portfolio of assets exists for some of the cash flows that arise from a group of insurance contracts, the entity can use the fair value of those assets to measure the relevant fulfilment cash flows instead of explicitly estimating the cash flows and discount rate. B47 Ind AS 117 does not require an entity to use a replicating portfolio technique. However, if a replicating asset or portfolio does exist for some of the cash flows that arise from insurance contracts and an entity chooses to use a different technique, the entity shall satisfy itself that a replicating portfolio technique would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adict observable market variables. For example, estimated probabilities for future inflation rate scenarios shall be as consistent as possible with probabilities implied by market interest rates. B52 In some cases, an entity may conclude that market variables vary independently of non-market variables. If so, the entity shall consider scenarios that reflect the range of outcomes for the non-market variables, with each scenario using the same observed value of the market variable. B53 In other cases, market variables and non-market variables may be correlated. For example, there may be evidence that lapse rates (a non-market variable) are correlated with interest rates (a market variable). Similarly, there may be evidence that claim levels for house or car insurance are correlated with economic cycles and therefore with interest rates and expense amounts. The entity shall ensure that the probabilities for the scenarios and the risk adjustments for the non-financial risk that relates to the market variables are consistent with the observed market prices that depend on those market variables. Using current estimates (paragraph 33(c)) B54 In estimating each cash flow scenario and its p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period was 20 per cent worse than the previous mortality experience and previous expectations of mortality experience. Several factors could have caused the sudden change in experience, including: (a) lasting changes in mortality; (b) changes in the characteristics of the insured population (for example, changes in underwriting or distribution, or selective lapses by policyholders in unusually good health); (c) random fluctuations; or (d) identifiable non-recurring causes. B57 An entity shall investigate the reasons for the change in experience and develop new estimates of cash flows and probabilities in the light of the most recent experience, the earlier experience and other information. The result for the example in paragraph B56 would typically be that the expected present value of death benefits changes, but not by as much as 20 per cent. In the example in paragraph B56, if mortality rates continue to be significantly higher than the previous estimates for reasons that are expected to continue, the estimated probability assigned to the high-mortality scenarios will increase. B58 Estimates of non-market variables shall include information about the current level of insured even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the policyholders may differ from the expected behaviour. This requirement to determine the expected value applies regardless of the number of contracts in a group; for example it applies even if the group comprises a single contract. Thus, the measurement of a group of insurance contracts shall not assume a 100 per cent probability that policyholders will: (a) surrender their contracts, if there is some probability that some of the policyholders will not; or (b) continue their contracts, if there is some probability that some of the policyholders will not. B63 When an issuer of an insurance contract is required by the contract to renew or otherwise continue the contract, it shall apply paragraph 34 to assess whether premiums and related cash flows that arise from the renewed contract are within the boundary of the original contract. B64 Paragraph 34 refers to an entity s practical ability to set a price at a future date (a renewal date) that fully reflects the risks in the contract from that date. An entity has that practical ability in the absence of constraints that prevent the entity from setting the same price it would for a new contract with the same characteristics as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ims and processing claim payments). (g) costs the entity will incur in providing contractual benefits paid in kind. (h) policy administration and maintenance costs, such as costs of premium billing and handling policy changes (for example, conversions and reinstatements). Such costs also include recurring commissions that are expected to be paid to intermediaries if a particular policyholder continues to pay the premiums within the boundary of the insurance contract. (i) transaction-based taxes (such as premium taxes, value added taxes and goods and services taxes) and levies (such as fire service levies and guarantee fund assessments) that arise directly from existing insurance contracts, or that can be attributed to them on a reasonable and consistent basis. (j) payments by the insurer in a fiduciary capacity to meet tax obligations incurred by the policyholder, and related receipts. (k) potential cash inflows from recoveries (such as salvage and subrogation) on future claims covered by existing insurance contracts and, to the extent that they do not qualify for recognition as separate assets, potential cash inflows from recoveries on past claims. (ka) costs the entity will incur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r funds and shareholder funds, if those cash flows do not change the amount that will be paid to the policyholders. (h) cash flows arising from components separated from the insurance contract and accounted for using other applicable Standards (see paragraphs 10 13). B66A Before the recognition of a group of insurance contracts, an entity might be required to recognise an asset or liability for cash flows related to the group of insurance contracts other than insurance acquisition cash flows either because of the occurrence of the cash flows or because of the requirements of another Ind AS. Cash flows are related to the group of insurance contracts if those cash flows would have been included in the fulfilment cash flows at the date of initial recognition of the group had they been paid or received after that date. To apply paragraph 38(c)(ii) an entity shall derecognise such an asset or liability to the extent that the asset or liability would not be recognised separately from the group of insurance contracts if the cash flow or the application of the Ind AS occurred at the date of initial recognition of the group of insurance contracts. Contracts with cash flows that affect or ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e underlying items to each group on a systematic and rational basis. B71 After all insurance contract services have been provided to the contracts in a group, the fulfilment cash flows may still include payments expected to be made to current policyholders in other groups or future policyholders. An entity is not required to continue to allocate such fulfilment cash flows to specific groups but can instead recognise and measure a liability for such fulfilment cash flows arising from all groups. Discount rates (paragraph 36) B72 An entity shall use the following discount rates in applying Ind AS 117: (a) to measure the fulfilment cash flows current discount rates applying paragraph 36; (b) to determine the interest to accrete on the contractual service margin applying paragraph 44(b) for insurance contracts without direct participation features discount rates determined at the date of initial recognition of a group of contracts, applying paragraph 36 to nominal cash flows that do not vary based on the returns on any underlying items; (c) to measure the changes to the contractual service margin applying paragraphs B96(a)-B96(b) and B96(d) for insurance contracts without direct partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted for the effect of that variability and discounted at a rate that reflects the adjustment made. (c) nominal cash flows (ie those that include the effect of inflation) shall be discounted at rates that include the effect of inflation; and (d) real cash flows (ie those that exclude the effect of inflation) shall be discounted at rates that exclude the effect of inflation. B75 Paragraph B74(b) requires cash flows that vary based on the returns on underlying items to be discounted using rates that reflect that variability, or to be adjusted for the effect of that variability and discounted at a rate that reflects the adjustment made. The variability is a relevant factor regardless of whether it arises because of contractual terms or because the entity exercises discretion, and regardless of whether the entity holds the underlying items. B76 Cash flows that vary with returns on underlying items with variable returns, but that are subject to a guarantee of a minimum return, do not vary solely based on the returns on the underlying items, even when the guaranteed amount is lower than the expected return on the underlying items. Hence, an entity shall adjust the rate that reflects the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f insurance contracts. That adjustment shall reflect the difference between the liquidity characteristics of the group of insurance contracts and the liquidity characteristics of the assets used to determine the yield curve. Yield curves reflect assets traded in active markets that the holder can typically sell readily at any time without incurring significant costs. In contrast, under some insurance contracts the entity cannot be forced to make payments earlier than the occurrence of insured events, or dates specified in the contracts. B80 Hence, for cash flows of insurance contracts that do not vary based on the returns on underlying items, an entity may determine discount rates by adjusting a liquid risk-free yield curve to reflect the differences between the liquidity characteristics of the financial instruments that underlie the rates observed in the market and the liquidity characteristics of the insurance contracts (a bottom-up approach). B81 Alternatively, an entity may determine the appropriate discount rates for insurance contracts based on a yield curve that reflects the current market rates of return implicit in a fair value measurement of a reference portfolio of asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certainty about the amount and timing of cash flows. However, in practice the top-down approach and the bottomup approach may result in different yield curves, even in the same currency. This is because of the inherent limitations in estimating the adjustments made under each approach, and the possible lack of an adjustment for different liquidity characteristics in the top-down approach. An entity is not required to reconcile the discount rate determined under its chosen approach with the discount rate that would have been determined under the other approach. B85 Ind AS 117 does not specify restrictions on the reference portfolio of assets used in applying paragraph B81. However, fewer adjustments would be required to eliminate factors that are not relevant to the insurance contracts when the reference portfolio of assets has similar characteristics. For example, if the cash flows from the insurance contracts do not vary based on the returns on underlying items, fewer adjustments would be required if an entity used debt instruments as a starting point rather than equity instruments. For debt instruments, the objective would be to eliminate from the total bond yield the effect of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-financial risk shall reflect all non-financial risks associated with the insurance contracts. It shall not reflect the risks that do not arise from the insurance contracts, such as general operational risk. B90 The risk adjustment for non-financial risk shall be included in the measurement in an explicit way. The risk adjustment for non-financial risk is conceptually separate from the estimates of future cash flows and the discount rates that adjust those cash flows. The entity shall not double-count the risk adjustment for nonfinancial risk by, for example, also including the risk adjustment for non-financial risk implicitly when determining the estimates of future cash flows or the discount rates. The discount rates that are disclosed to comply with paragraph 120 shall not include any implicit adjustments for non-financial risk. B91 Ind AS 117 does not specify the estimation technique(s) used to determine the risk adjustment for nonfinancial risk. However, to reflect the compensation the entity would require for bearing the non-financial risk, the risk adjustment for non-financial risk shall have the following characteristics: (a) risks with low frequency and high severity wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allocation approach for the liability for remaining coverage in paragraphs 55 59 and 69-70A applies, on initial recognition the contractual service margin is calculated applying paragraph 38 for acquired insurance contracts issued and paragraph 65 for acquired reinsurance contracts held using the consideration received or paid for the contracts as a proxy for the premiums received or paid at the date of initial recognition. B95A If acquired insurance contracts issued are onerous, applying paragraph 47, the entity shall recognise the excess of the fulfilment cash flows over the consideration paid or received as part of goodwill or gain on a bargain purchase as capital reserve either directly or through Other Comprehensive Income as per the requirements of Ind AS 103 for contracts acquired in a business combination within the scope of Ind AS 103, or as a loss in profit or loss for contracts acquired in a transfer. The entity shall establish a loss component of the liability for remaining coverage for that excess, and apply paragraphs 49 52 to allocate subsequent changes in fulfilment cash flows to that loss component. B95B For a group of reinsurance contracts held to which paragraphs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racts applying paragraphs B93‒B95A. Changes in the carrying amount of the contractual service margin for insurance contracts without direct participation features (paragraph 44) B96 For insurance contracts without direct participation features, paragraph 44(c) requires an adjustment to the contractual service margin of a group of insurance contracts for changes in fulfilment cash flows that relate to future service. These changes comprise: (a) experience adjustments arising from premiums received in the period that relate to future service, and related cash flows such as insurance acquisition cash flows and premium-based taxes, measured at the discount rates specified in paragraph B72(c). (b) changes in estimates of the present value of the future cash flows in the liability for remaining coverage, except those described in paragraph B97(a), measured at the discount rates specified in paragraph B72(c). (c) differences between any investment component expected to become payable in the period and the actual investment component that becomes payable in the period. Those differences are determined by comparing (i) the actual investment component that becomes payable in the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine its commitment under the contract; for example, based on a fixed interest rate, or on returns that vary based on specified asset returns. B99 An entity shall use that specification to distinguish between the effect of changes in assumptions that relate to financial risk on that commitment (which do not adjust the contractual service margin) and the effect of discretionary changes to that commitment (which adjust the contractual service margin). B100 If an entity cannot specify at inception of the contract what it regards as its commitment under the contract and what it regards as discretionary, it shall regard its commitment to be the return implicit in the estimate of the fulfilment cash flows at inception of the contract, updated to reflect current assumptions that relate to financial risk. Changes in the carrying amount of the contractual service margin for insurance contracts with direct participation features (paragraph 45) B101 Insurance contracts with direct participation features are insurance contracts that are substantially investment-related service contracts under which an entity promises an investment return based on underlying items. Hence, they are defined as ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) an entity can change the underlying items that determine the amount of the entity s obligation with retrospective effect; or (b) there are no underlying items identified, even if the policyholder could be provided with a return that generally reflects the entity s overall performance and expectations, or the performance and expectations of a subset of assets the entity holds. An example of such a return is a crediting rate or dividend payment set at the end of the period to which it relates. In this case, the obligation to the policyholder reflects the crediting rate or dividend amounts the entity has set, and does not reflect identified underlying items. B107 Paragraph B101(b) requires that the entity expects a substantial share of the fair value returns on the underlying items will be paid to the policyholder and paragraph B101(c) requires that the entity expects a substantial proportion of any change in the amounts to be paid to the policyholder to vary with the change in fair value of the underlying items. An entity shall: (a) interpret the term substantial in both paragraphs in the context of the objective of insurance contracts with direct participation features being con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lows other than those specified in (b). An entity shall apply paragraphs B96 B97, consistent with insurance contracts without direct participation features, to determine to what extent they relate to future service and, applying paragraph 45(c), adjust the contractual service margin. All the adjustments are measured using current discount rates. (b) the change in the effect of the time value of money and financial risks not arising from the underlying items; for example, the effect of financial guarantees. These relate to future service and, applying paragraph 45(c), adjust the contractual service margin, except to the extent that paragraph B115 applies. B114 An entity is not required to identify the adjustments to the contractual service margin required by paragraphs B112 and B113 separately. Instead, a combined amount may be determined for some or all of the adjustments. Risk mitigation B115 To the extent that an entity meets the conditions in paragraph B116, it may choose not to recognise a change in the contractual service margin to reflect some or all of the changes in the effect of the time value of money and financial risk on: (a) the amount of the entity s share of the unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct the insurance contract services provided under the group of insurance contracts in that period (see paragraphs 44(e), 45(e) and 66(e)). The amount is determined by: (a) identifying the coverage units in the group. The number of coverage units in a group is the quantity of insurance contract services provided by the contracts in the group, determined by considering for each contract the quantity of the benefits provided under a contract and its expected coverage period. (b) allocating the contractual service margin at the end of the period (before recognising any amounts in profit or loss to reflect the insurance contract services provided in the period) equally to each coverage unit provided in the current period and expected to be provided in the future. (c) recognising in profit or loss the amount allocated to coverage units provided in the period. B119A To apply paragraph B119, the period of investment-return service or investment-related service ends at or before the date that all amounts due to current policyholders relating to those services have been paid, without considering payments to future policyholders included in the fulfilment cash flows applying paragraph B68. B1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e revenue for a group of insurance contracts is the consideration for the contracts, ie the amount of premiums paid to the entity: (a) adjusted for a financing effect; and (b) excluding any investment components. B121 Paragraph 83 requires the amount of insurance revenue recognised in a period to depict the transfer of promised services at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those services. The total consideration for a group of contracts covers the following amounts: (a) amounts related to the provision of services, comprising: (i) insurance service expenses, excluding any amounts relating to the risk adjustment for nonfinancial risk included in (ii) and any amounts allocated to the loss component of the liability for remaining coverage; (ia) amounts related to income tax that are specifically chargeable to the policyholder; (ii) the risk adjustment for non-financial risk, excluding any amounts allocated to the loss component of the liability for remaining coverage; and (iii) the contractual service margin. (b) amounts related to insurance acquisition cash flows. B122 Insurance revenue for a period relating to the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remaining coverage applying paragraph 51(a); (ii) repayments of investment components; (iii) amounts that relate to transaction-based taxes collected on behalf of third parties (such as premium taxes, value added taxes and goods and services taxes) (see paragraph B65(i)); (iv) insurance acquisition expenses (see paragraph B125); and (v) the amount related to the risk adjustment for non-financial risk (see (b)). (b) the change in the risk adjustment for non-financial risk, excluding: (i) changes included in insurance finance income or expenses applying paragraph 87; (ii) changes that adjust the contractual service margin because they relate to future service applying paragraphs 44(c) and 45(c); and (iii) amounts allocated to the loss component of the liability for remaining coverage applying paragraph 51(b). (c) the amount of the contractual service margin recognised in profit or loss in the period, applying paragraphs 44(e) and 45(e). (d) other amounts, if any, for example, experience adjustments for premium receipts other than those that relate to future service (see paragraph B96(a)). B125 An entity shall determine insurance revenue related to insurance acquisition cash flows by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider for each portfolio the assets that the entity holds and how it accounts for those assets. B130 If paragraph 88(b) applies, an entity shall include in profit or loss an amount determined by a systematic allocation of the expected total finance income or expenses over the duration of the group of insurance contracts. In this context, a systematic allocation is an allocation of the total expected finance income or expenses of a group of insurance contracts over the duration of the group that: (a) is based on characteristics of the contracts, without reference to factors that do not affect the cash flows expected to arise under the contracts. For example, the allocation of the finance income or expenses shall not be based on expected recognised returns on assets if those expected recognised returns do not affect the cash flows of the contracts in the group. (b) results in the amounts recognised in other comprehensive income over the duration of the group of contracts totalling zero. The cumulative amount recognised in other comprehensive income at any date is the difference between the carrying amount of the group of contracts and the amount that the group would be measured at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r because it is required to, holds the underlying items for insurance contracts with direct participation features. If an entity chooses to disaggregate insurance finance income or expenses applying paragraph 89(b), it shall include in profit or loss expenses or income that exactly match the income or expenses included in profit or loss for the underlying items, resulting in the net of the separately presented items being nil. B135 An entity may qualify for the accounting policy choice in paragraph 89 in some periods but not in others because of a change in whether it holds the underlying items. If such a change occurs, the accounting policy choice available to the entity changes from that set out in paragraph 88 to that set out in paragraph 89, or vice versa. Hence, an entity might change its accounting policy between that set out in paragraph 88(b) and that set out in paragraph 89(b). In making such a change an entity shall: (a) include the accumulated amount previously included in other comprehensive income by the date of the change as a reclassification adjustment in profit or loss in the period of change and in future periods, as follows: (i) if the entity had previously appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Information added paragraphs C28A C28E and C33A. An entity that chooses to apply paragraphs C28A C28E and C33A shall apply them on initial application of Ind AS 117. Transition C3 Unless it is impracticable to do so, or paragraph C5A applies, an entity shall apply Ind AS 117 retrospectively, except that: (a) an entity is not required to present the quantitative information required by paragraph 28(f) of Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors; and (b) an entity shall not apply the option in paragraph B115 for periods before the transition date. An entity may apply the option in paragraph B115 prospectively on or after the transition date if, and only if, the entity designates risk mitigation relationships at or before the date it applies the option. C4 To apply Ind AS 117 retrospectively, an entity shall at the transition date: (a) identify, recognise and measure each group of insurance contracts as if Ind AS 117 had always applied; (aa) identify, recognise and measure any assets for insurance acquisition cash flows as if Ind AS 117 had always applied (except that an entity is not required to apply the recoverability assessment in paragraph 28E b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) assessments of insurance contracts or groups of insurance contracts that would have been made at the date of inception or initial recognition; (b) amounts related to the contractual service margin or loss component for insurance contracts without direct participation features; (c) amounts related to the contractual service margin or loss component for insurance contracts with direct participation features; and (d) insurance finance income or expenses. C8 To achieve the objective of the modified retrospective approach, an entity is permitted to use each modification in paragraphs C9 C19A only to the extent that an entity does not have reasonable and supportable information to apply a retrospective approach. Assessments at inception or initial recognition C9 To the extent permitted by paragraph C8, an entity shall determine the following matters using information available at the transition date: (a) how to identify groups of insurance contracts, applying paragraphs 14 24; (b) whether an insurance contract meets the definition of an insurance contract with direct participation features, applying paragraphs B101 B109; (c) how to identify discretionary cash flows for insurance cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition (or subsequently) by determining an average spread between an observable yield curve and the yield curve estimated applying paragraphs 36 and B72 B85, and applying that spread to that observable yield curve. That spread shall be an average over at least three years immediately before the transition date. C14 To the extent permitted by paragraph C8, an entity shall determine the risk adjustment for non-financial risk at the date of initial recognition of a group of insurance contracts (or subsequently) by adjusting the risk adjustment for non-financial risk at the transition date by the expected release of risk before the transition date. The expected release of risk shall be determined by reference to the release of risk for similar insurance contracts that the entity issues at the transition date. C14A Applying paragraph B137, an entity may choose not to change the treatment of accounting estimates made in previous interim financial statements. To the extent permitted by paragraph C8, such an entity shall determine the contractual service margin or loss component at the transition date as if the entity had not prepared interim financial statements before the transition date. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the transition date (see paragraph B119). C16 If applying paragraphs C12 C14D results in a loss component of the liability for remaining coverage at the date of initial recognition, an entity shall determine any amounts allocated to the loss component before the transition date applying paragraphs C12 C14D and using a systematic basis of allocation. C16A For a group of reinsurance contracts held that provides coverage for an onerous group of insurance contracts and was entered into before or at the same time that the insurance contracts were issued, an entity shall establish a loss-recovery component of the asset for remaining coverage at the transition date (see paragraphs 66A 66B). To the extent permitted by paragraph C8, an entity shall determine the loss-recovery component by multiplying: (a) the loss component of the liability for remaining coverage for the underlying insurance contracts at the transition date (see paragraphs C16 and C20); and (b) the percentage of claims for the underlying insurance contracts the entity expects to recover from the group of reinsurance contracts held. C16B Applying paragraphs 14‒22, at the transition date an entity might include in an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g coverage units at the transition date with the coverage units provided under the group of contracts before the transition date; or (e) if (a) (c) result in a loss component adjust the loss component to nil and increase the liability for remaining coverage excluding the loss component by the same amount. C17A To the extent permitted by paragraph C8, an entity shall apply paragraphs C14B‒C14D to recognise an asset for insurance acquisition cash flows, and any adjustment to the contractual service margin of a group of insurance contracts with direct participation features for insurance acquisition cash flows (see paragraph C17(c)(iv)). Insurance finance income or expenses C18 For groups of insurance contracts that, applying paragraph C10, include contracts issued more than one year apart: (a) an entity is permitted to determine the discount rates at the date of initial recognition of a group specified in paragraphs B72(b) B72(e)(ii) and the discount rates at the date of the incurred claim specified in paragraph B72(e)(iii) at the transition date instead of at the date of initial recognition or incurred claim. (b) if an entity chooses to disaggregate insurance finance income or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aph C13; and (iv) for insurance contracts with direct participation features to which paragraph B134 applies as equal to the cumulative amount recognised in other comprehensive income on the underlying items. C19A Applying paragraph B137, an entity may choose not to change the treatment of accounting estimates made in previous interim financial statements. To the extent permitted by paragraph C8, such an entity shall determine amounts related to insurance finance income or expenses at the transition date as if it had not prepared interim financial statements before the transition date. Fair value approach C20 To apply the fair value approach, an entity shall determine the contractual service margin or loss component of the liability for remaining coverage at the transition date as the difference between the fair value of a group of insurance contracts at that date and the fulfilment cash flows measured at that date. In determining that fair value, an entity shall not apply paragraph 47 of Ind AS 113, Fair Value Measurement (relating to demand features). C20A For a group of reinsurance contracts held to which paragraphs 66A 66B apply (without the need to meet the condition set out i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity is not required to apply paragraph 22, and may include in a group contracts issued more than one year apart. An entity shall only divide groups into those including only contracts issued within a year (or less) if it has reasonable and supportable information to make the division. Whether or not an entity applies paragraph 22, it is permitted to determine the discount rates at the date of initial recognition of a group specified in paragraphs B72(b) B72(e)(ii) and the discount rates at the date of the incurred claim specified in paragraph B72(e)(iii) at the transition date instead of at the date of initial recognition or incurred claim. C24 In applying the fair value approach, if an entity chooses to disaggregate insurance finance income or expenses between profit or loss and other comprehensive income, it is permitted to determine the cumulative amount of insurance finance income or expenses recognised in other comprehensive income at the transition date: (a) retrospectively but only if it has reasonable and supportable information to do so; or (b) as nil unless (c) applies; and (c) for insurance contracts with direct participation features to which paragraph B134 applies as e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at occurred earlier than five years before the end of the annual reporting period in which it first applies Ind AS 117. However, if an entity does not disclose that information, it shall disclose that fact. Entities that first apply Ind AS 117 and Ind AS 109 at the same time C28A An entity that first applies Ind AS 117 and Ind AS 109 at the same time is permitted to apply paragraphs C28B C28E (classification overlay) for the purpose of presenting comparative information about a financial asset where the comparative information for that financial asset has not been restated for Ind AS 109. Comparative information for a financial asset will not be restated for Ind AS 109 where the entity restates prior periods but the financial asset has been derecognised during those prior periods (see paragraph 7.2.1 of Ind AS 109). C28B An entity applying the classification overlay to a financial asset shall present comparative information as if the classification and measurement requirements of Ind AS 109 had been applied to that financial asset. The entity shall use reasonable and supportable information available at the transition date (see paragraph C2(b)) to determine how the entity expects t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contracts within the scope of Ind AS 117. Examples of financial assets that would not be eligible for reassessment are financial assets held in respect of banking activities or financial assets held in funds relating to investment contracts that are outside the scope of Ind AS 117. (b) shall revoke its previous designation of a financial asset as measured at fair value through profit or loss if the condition in paragraph 4.1.5 of Ind AS 109 is no longer met because of the application of Ind AS 117. (c) may designate a financial asset as measured at fair value through profit or loss if the condition in paragraph 4.1.5 of Ind AS 109 is met. (d) may designate an investment in an equity instrument as at fair value through other comprehensive income applying paragraph 5.7.5 of Ind AS 109. (e) may revoke its previous designation of an investment in an equity instrument as at fair value through other comprehensive income applying paragraph 5.7.5 of Ind AS 109. C30 An entity shall apply paragraph C29 on the basis of the facts and circumstances that exist at the date of initial application of Ind AS 117. An entity shall apply those designations and classifications retrospectively. In doing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between the transition date and date of initial application of Ind AS 117, an entity may apply paragraphs C28B C28E (classification overlay) for the purpose of presenting comparative information as if paragraph C29 had been applied to that asset. Such an entity shall adapt the requirements of paragraphs C28B C28E so that the classification overlay is based on how the entity expects the financial asset would be designated applying paragraph C29 at the date of initial application of Ind AS 117. Withdrawal of other Indian Accounting Standards C34 Ind AS 117 supersedes Ind AS 104 Insurance Contracts. Appendix 1 Note: This Appendix is not a part of the Indian Accounting Standard. The purpose of this Appendix is only to bring out the major differences, if any, between Indian Accounting Standard (Ind AS) 117 and the corresponding International Financial Reporting Standard (IFRS) 17, Insurance Contracts, issued by the International Accounting Standards Board. Comparison with IFRS 17, Insurance Contracts 1. IFRS 17, Insurance Contracts, is applicable globally with effect from 1st January 2023. In India, it shall be applicable with effect from 1st April 2024. In case of insurance companies, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atic allocation applying paragraph 88(b) of Ind AS 117, or by an amount that eliminates accounting mismatches with the finance income or expenses arising on the underlying items, applying paragraph 89(b) of Ind AS 117; and (j) finance income and expenses reinsurance contracts held excluded from profit or loss when total reinsurance finance or expenses is disaggregated to include in profit or loss an amount determined by a systematic allocation applying paragraph 88(b) of Ind AS 117. (ii) in paragraph 54, (a) after item (d), the following item shall be inserted, namely: (da) portfolios of contracts within the scope of Ind AS 117 that are assets, disaggregated as required by paragraph 78 of Ind AS 117; (b) after item (m), the following item shall be inserted, namely: (ma) portfolios of contracts within the scope of Ind AS 117 that are liabilities, disaggregated as required by paragraph 78 of Ind AS 117; (iii) in paragraph 82, (a) for item (a), the following item shall be substituted, namely: (a) revenue, presenting separately; (i) interest revenue calculated using the effective interest method; and (ii) insurance revenue (see Ind AS 117); (b) after item (aa), the following items shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umbers are retained in Ind AS 19 . (L) in Indian Accounting Standard (Ind AS) 28 , (i) for paragraph 18, the following paragraph shall be substituted, namely: 18. When an investment in an associate or a joint venture is held by, or is held indirectly through, an entity that is a venture capital organisation, or a mutual fund, unit trust and similar entities including investment-linked insurance funds, the entity may elect to measure that investment at fair value through profit or loss in accordance with Ind AS 109. An example of an investment-linked insurance fund is a fund held by an entity as the underlying items for a group of insurance contracts with direct participation features. For the purposes of this election, insurance contracts include investment contracts with discretionary participation features. An entity shall make this election separately for each associate or joint venture, at initial recognition of the associate or joint venture. (See Ind AS 117, Insurance Contracts, for terms used in this paragraph that are defined in that Standard.) (ii) for paragraph 45F, the following paragraph shall be substituted, namely: 45F Ind AS 117 amended paragraph 18. An entity shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 109 instead of Ind AS 117 to such contracts. (e) [Refer Appendix 1]. (ii) after paragraph 33, the following paragraph shall be inserted, namely: 33A Some entities operate, either internally or externally, an investment fund that provides investors with benefits determined by units in the fund and recognise financial liabilities for the amounts to be paid to those investors. Similarly, some entities issue groups of insurance contracts with direct participation features and those entities hold the underlying items. Some such funds or underlying items include the entity s treasury shares. Despite paragraph 33, an entity may elect not to deduct from equity a treasury share that is included in such a fund or is an underlying item when, and only when, an entity reacquires its own equity instrument for such purposes. Instead, the entity may elect to continue to account for that treasury share as equity and to account for the reacquired instrument as if the instrument were a financial asset and measure it at fair value through profit or loss in accordance with Ind AS 109. That election is irrevocable and made on an instrument-by-instrument basis. For the purposes of this election, insuran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance Contracts, that are assets and any assets for insurance acquisition cash flows as defined in Ind AS 117; and (ii) after paragraph 140L, the following paragraph shall be inserted, namely: 140M [Refer Appendix 1] 140N Ind AS 117 amended paragraph 2. An entity shall apply that amendment when it applies Ind AS 117. (iii) in Appendix 1, for paragraph 8, the following paragraph shall be substituted, namely: 8. Paragraphs 138-140K and 140M related to transitional provisions and effective date have not been included in Ind AS 36 as these are not relevant in Indian context. However, in order to maintain consistency with paragraph numbers of IAS 36, these paragraph numbers are retained in Ind AS 36 . (O) in Indian Accounting Standard (Ind AS) 37 , (i) in paragraph 5, for item (e), the following item shall be substituted, namely: (e) insurance contracts and other contracts within the scope of Ind AS 117, Insurance Contracts; (ii) for paragraph 103, the following paragraph shall be substituted, namely: 103 Ind AS 117 amended paragraph 5. An entity shall apply that amendment when it applies Ind AS 117. (iii) in Appendix 1, for paragraph 4, the following paragraph shall be substituted, nam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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