The new AASB 17 Insurance Contracts does not just apply to Insurers, it applies to insurance contracts, no matter who the organisation is that issues it. Whilst it is easy to assume that it doesn’t apply to a you if you are a builder, or make and sell products, you may find that it does capture contracts in your business that you have never considered to be insurance contracts. Therefore, it is important you understand the scope of the new standard and whether you will be impacted. A contract is an insurance contract if you have agreed to compensate the customer if a specified uncertain future event adversely affects them. Our publication goes through the types of contracts that may be impacted in more detail.
Now is the time to consider your arrangements and identify any that may be in the scope of AASB 17. The new standard applies for years beginning on or after 1 January 2023 (30 June 2024 year-ends). If you do have contracts in scope of AASB 17, it will be important to start considering how they will need to be accounted in advance of the date of application.
The application may result in significantly different accounting compared to your current treatment of these arrangements and consideration may be required as to how you communicate these impacts to shareholders and other stakeholders.
Identifying if you are impacted by this new standard can be challenging. If you need further assistance in assessing the impact on your organisation, please contact your local Moore Australia Advisor.