Document ID: chunk:federal_register_of_legislation:F2023L00015:reg:21:p75
Version: federal_register_of_legislation:F2023L00015
Segment Type: reg
Provision Reference: reg 21 (pt 75/101)
Character Range: 238346–241557

most highly. However, balancing all the feedback received, the Boards noted that:

          (a) having an identifiable coverage period and the enforceable nature of an arrangement were generally regarded as the most crucial of the indicators;

          (b) the similarity of risks covered and benefits provided and the source and extent of funding from those who stand to benefit from an arrangement were generally regarded as relatively important indicators; and

          (c) having management practices and assessing financial performance in a manner consistent with insurance industry practices and the existence of assets being held in a separate fund, or an entity having access to earmarked assets, that are restricted to being used to meet benefits to an arrangement's participants were generally regarded as the least important of the indicators.

     BC246        There was no specific feedback from respondents to AASB ED 319/NZASB ED 2022-3 on the Boards' rejecting the following factors in determining whether an arrangement would be within the scope of AASB 17/PBE IFRS 17:

          (a) the for-profit versus not-for-profit status of the entity;

          (b) scoping out social benefits or specific entities; and

          (c) the fault-based nature of the arrangement.

Boards' conclusions on identifying public sector arrangements scoped into the AASB 17/PBE IFRS 17

     BC247        The Boards reflected on their reasons for proposing a collective assessment of the six proposed indicators and the feedback received and concluded that, in determining when a public sector arrangement should fall within the scope of AASB 17/PBE IFRS 17:

          (a) the six proposed indicators are all potentially relevant;

          (b) no other indicators should be applied; and

          (c) it would be beneficial to provide a more structured approach to applying the indicators, rather than the proposed collective assessment approach.

     BC248        Instead of identifying six indicators, the Board concluded that:

          (a)                    two of the proposed indicators should instead be pre-requisites for applying AASB 17/PBE IFRS 17;

          (b)                   two of the proposed indicators should remain as indicators to be assessed collectively; and

          (c)                    two of the proposed indicators should instead be ranked lower than indicators and be 'other considerations' to be assessed collectively.

     The Boards considered that this would provide a more rigorous approach to determining public sector arrangements that should fall within the scope of AASB 17/PBE IFRS 17. However, they noted that judgement would still need to be exercised in applying the pre-requisites, indicators and other considerations based on each entity's circumstances.

     BC249        More specifically, the Boards concluded the following.

          (a) The existence of an identifiable coverage period for a public sector arrangement is a pre-requisite for applying AASB 17/PBE IFRS 17 on the basis that the coverage period is crucial for determining the fulfilment cash flows to include when measuring insurance liabilities and for determining the timing