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Entities that issue insurance policies soon will be able to draw on an updated system of electronic tags in completing financial statements when using international financial reporting standards.
The International Accounting Standards Board told its staff Oct. 24 to proceed with preparing the final update to the digital tags—known as a taxonomy—for IFRS 17: Insurance Contracts.
IASB decided to advance the insurance taxonomy despite the absence of feedback from insurance company issuers or investors. No comments had been submitted on the proposal when the comment period closed Sept. 18.
Several board members, including Vice-Chair Sue Lloyd, Amaro Gomes, and Martin Edelmann, expressed disappointment that the proposed update failed to draw comments, which sparked broader questions about how IASB handles IFRS taxonomy.
Lloyd suggested that the board “help companies picture what the disclosures will look like” and “sell these documents a bit more to the market.”
Gomez said the dearth of comments could reflect a “silent majority” that endorsed the taxonomy update and saw no need to offer improvements.
Issuing the proposed taxonomy update at the same time as IFRS 17 might have given insurers and accounting professionals too much information to process, and as a result, commenters had insufficient time to respond to the update, board member Mary Tokar said.
IASB endorsed the proposed update concurrently when it approved IFRS 17, and published both documents in May.
IFRS 17 will replace IFRS 4: Insurance Contracts, when it takes effect Jan. 1, 2021.
Gomes and Tokar called on IASB to further consult on the taxonomy as the 2021 deadline for implementing IFRS 17 approaches.
Lloyd cautioned the board not to risk upsetting the taxonomy’s stability or generating expectations that the standard might be revisited.
IASB expects to publish the final taxonomy update to IFRS 17 by late November or early December, a staff member said.
The staff member also said the board plans to launch an initiative this year to garner views on its overall taxonomy system.
Board staff involved with the update worked with members of IASB’s insurance team and its IFRS Taxonomy Consultative Group (ITCG) on the proposed taxonomy revisions.
The ITCG comprises regulators and others with practical experience in applying the eXtensible Business Reporting Language to IFRS taxonomy.
The proposal included revisions to the taxonomy that added line items, tables, or both on:
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Papers drafted for the IASB meeting are at http://www.ifrs.org/news-and-events/calendar/2017/october/international-accounting-standards-board/.
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