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Compiled AASB Standard  AASB 4

Insurance Contracts

This compiled Standard applies to annual periods beginning on or after 1 January 2021. Earlier application is permitted for annual periods beginning on or after 1 January 2018 but before 1 January 2021.  It incorporates relevant amendments made up to and including 17 September 2020.
Prepared on 15 February 2021 by the staff of the Australian Accounting Standards Board.
Compilation no. 4
Compilation date:  31 December 2020

Obtaining copies of Accounting Standards
Compiled versions of Standards, original Standards and amending Standards (see Compilation Details) are available on the AASB website: www.aasb.gov.au.
Australian Accounting Standards Board
PO Box 204
Collins Street West
Victoria   8007
AUSTRALIA
Phone: (03) 9617 7600
E-mail: standard@aasb.gov.au
Website: www.aasb.gov.au

Other enquiries
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E-mail: standard@aasb.gov.au

COPYRIGHT
© Commonwealth of Australia 2021
This compiled AASB Standard contains IFRS Foundation copyright material.  Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source.  Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The National Director, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.
All existing rights in this material are reserved outside Australia.  Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.  Further information and requests for authorisation to reproduce for commercial purposes outside Australia should be addressed to the IFRS Foundation at www.ifrs.org.

Contents

COMPARISON WITH IFRS 4
ACCOUNTING STANDARD
AASB 4 INSURANCE CONTRACTS

from paragraph
Objective 1
Scope 2
Embedded derivatives 7
Unbundling of deposit components 10
Recognition and measurement
Temporary exemption from some other Australian Accounting Standards 13
Liability adequacy test 15
Impairment of reinsurance assets 20
Temporary exemption from AASB 9 20A
First-time adopter 20L
Temporary exemption from specific requirements in AASB 128 20O
Changes in the basis for determining the contractual cash flows as a result of interest rate benchmark reform20R
Changes in accounting policies 21
Current market interest rates 24
Continuation of existing practices 25
Prudence 26
Future investment margins 27
Shadow accounting 30
Insurance contracts acquired in a business combination or portfolio transfer 31
Discretionary participation features
Discretionary participation features in insurance contracts 34
Discretionary participation features in financial instruments 35
PRESENTATION
The overlay approach 35B
Interaction with other requirements 35L
First-time adopter 35N
Disclosure
Explanation of recognised amounts 36
Nature and extent of risks arising from insurance contracts 38
Disclosures about the temporary exemption from AASB 9 39B
Disclosures about the overlay approach 39K
Effective date and transition 40
Disclosure 42
Redesignation of financial assets 45
Applying AASB 4 with AASB 9
Temporary exemption from AASB 9 46