ESMA’s statement on transparency on implementation of IFRS 17 Insurance Contracts

On 13 May 2022, the European Securities and Markets Authority (ESMA) issued a public statement on the Transparency on implementation of IFRS 17 Insurance Contracts.

IFRS 17 Insurance Contracts has been in force since 13 December 2021 and it will be applicable on a mandatory basis for financial periods beginning on or after 1 January 2023. Comparative information must be provided for previous financial periods, with the transition date being 1 January 2022. IFRS 17 replaces the currently applicable IFRS 4 Insurance Contracts. The changes in the new standard compared with IFRS 4 with regard to valuation and the information to be disclosed in financial statements are very significant.

ESMA’s statement emphasises the need for those applying the standard to provide sufficiently transparent and, as the application date approaches, more detailed information in their interim reports during 2022 and in the financial statement for 2022 about the transition and its impact, as required by IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. ESMA emphasises that information provided on the impact of application is expected to be both qualitative and quantitative. Based on the information provided, investors should be able to assess the impact of the application of the new standard on the financial position and performance of the entity.

IFRS 17 contains opportunities for interpretation and options on how an entity applies the standard. Financial statement supervisors expect entities to disclose their key decisions based on judgment.

Some entities will apply IFRS 9 Financial Instruments for the first time concurrently with IFRS 17. ESMA’s statement from 2016 Issues for consideration in implementing IFRS 9: Financial Instruments remain valid for these entities. Companies should also consider disclosing information about the possible impacts of the application of IFRS 17 on figures according to solvency regulations.

For further information, please contact:

Pentti Soininen, Senior IFRS Accounting Expert, pentti.soininen(at)