Document ID: chunk:federal_register_of_legislation:F2021C00205:body:0:p3
Version: federal_register_of_legislation:F2021C00205
Segment Type: other
Provision Reference: 
Character Range: 5823–8968

Contracts, is to specify the financial reporting for insurance contracts by any entity that issues such contracts (described in this Standard as an insurer) until the AASB and the IASB complete the second phase of the project on insurance contracts. In particular, this Standard requires:
(a) limited improvements to accounting by insurers for insurance contracts.
(b) disclosure that identifies and explains the amounts in an insurer's financial statements arising from insurance contracts and helps users of those financial statements understand the amount, timing and uncertainty of future cash flows from insurance contracts.

Scope
2 An entity shall apply this Standard to:
(a) insurance contracts (including reinsurance contracts) that it issues and reinsurance contracts that it holds.
(b) financial instruments that it issues with a discretionary participation feature (see paragraph 35). AASB 7 Financial Instruments: Disclosures requires disclosure about financial instruments, including financial instruments that contain such features.
3 This Standard does not address other aspects of accounting by insurers, such as accounting for financial assets held by insurers and financial liabilities issued by insurers (see AASB 132 Financial Instruments: Presentation, AASB 7 and AASB 9 Financial Instruments), except:
(a) paragraph 20A permits insurers that meet specified criteria to apply a temporary exemption from AASB 9;
(b) paragraph 35B permits insurers to apply the overlay approach to designated financial assets; and
(c) paragraph 45 permits insurers to reclassify in specified circumstances some or all of their financial assets so that the assets are measured at fair value through profit or loss.
Aus3.1 Notwithstanding paragraph 2, to comply with the requirements of this Standard, an entity shall apply:

               (a) AASB 1023 General Insurance Contracts to general insurance contracts, except for fixed-fee service contracts that meet the definition of an insurance contract under this Standard; and

               (b) AASB 1038 Life Insurance Contracts to life insurance contracts.

          Where this Standard provides an accounting policy choice, an entity shall apply that choice in the context of the requirements specified in AASB 1023 and AASB 1038, when applicable.
Aus3.2 This Standard includes only limited guidance in accounting for insurance contracts and disclosure requirements. AASB 1023 and AASB 1038 address all aspects of recognition, measurement and disclosure of general insurance contracts and life insurance contracts. The requirements of those Standards address a wider range of accounting requirements than this Standard, but enable simultaneous compliance with this Standard.
4 An entity shall not apply this Standard to:
(a) product warranties issued directly by a manufacturer, dealer or retailer (see AASB 15 Revenue from Contracts with Customers and AASB 137 Provisions, Contingent Liabilities and Contingent Assets).
(b) employers' assets and liabilities under employee benefit plans (see AASB 119 Employee Benefits and AASB 2 Share-based Payment) and retirement benefit obligations