Document ID: chunk:federal_register_of_legislation:F2023L00015:reg:21:p70
Version: federal_register_of_legislation:F2023L00015
Segment Type: reg
Provision Reference: reg 21 (pt 70/101)
Character Range: 224421–227389

of aid, such as benefits provided as the result of a disaster [IPSAS 42.AG10]. The IPSAS 42 definition is:

               Social risks are events or circumstances that:

               (a) relate to the characteristics of individuals and/or households – for example, age, health, poverty and employment status; and

               (b) may adversely affect the welfare of individuals and/or households, either by imposing additional demands on their resources or by reducing their income.

     BC226        The Boards observed that social risks identified in the definition are indicative, rather than implying that the same risks might not also be the subject of insurance contracts. They further noted that most, if not all, the classes of social risks mentioned in the definition could be the subject of insurance contracts sold by private sector entities, such as: annuities (age-related); health insurance (health-related); and income protection (related to health, poverty and/or employment status). Accordingly, the Boards concluded that it would not be productive to propose scoping out benefits relating to social risks using the definition in IPSAS 42.

     BC227        The Boards also considered whether it might be feasible to identify particular entities or activities that would not fall within the scope of AASB 17/PBE IFRS 17. For example, whether entities such as those closely associated with the hospital/health system, as a way of automatically excluding them and removing the need for an analysis of indicators to determine whether they need to apply AASB 17/PBE IFRS 17. In that context, the Boards noted that AASB 17/PBE IFRS 17 sets a precedent by specifically scoping out particular types of transactions conducted by particular types of entities that would otherwise probably need to be accounted for as insurance contracts. These transactions include, for example, warranties provided by a manufacturer, dealer or retailer in connection with the sale of its goods or services to a customer [AASB 17/PBE IFRS 17.7(a)].

Boards' proposal on scoping out social benefits or specific entities not being an indicator in AASB ED 319/NZASB ED 2022-3

     BC228        The Boards decided that, while it would provide certainty for some entities, they are generally opposed to specifically identifying public sector arrangements that are not within the scope of AASB 17/PBE IFRS 17 because it is typically not the role of the Boards to identify specific entities that should, or should not, apply particular Standards.

     BC229        The Boards also decided that while there may be some merit in proposing that specifically identified types of activities are not within the scope of AASB 17/PBE IFRS 17:

          (a) this could be problematic due to the potential interface between, for example, the public health system and the medical nature of many claims that might be the subject of arrangements that would be accounted for as insurance