Document ID: chunk:federal_register_of_legislation:F2023C00382:front:0:p86
Version: federal_register_of_legislation:F2023C00382
Segment Type: other
Provision Reference: 
Character Range: 226471–229292

liability for remaining coverage at the transition date as:
(a) the total fair value of the underlying items at that date; minus
(b) the fulfilment cash flows at that date; plus or minus
(c) an adjustment for:
(i) amounts charged by the entity to the policyholders (including amounts deducted from the underlying items) before that date.
(ii) amounts paid before that date that would not have varied based on the underlying items.
(iii) the change in the risk adjustment for non-financial risk caused by the release from risk before that date. The entity shall estimate this amount by reference to the release of risk for similar insurance contracts that the entity issues at the transition date.
(iv) insurance acquisition cash flows paid (or for which a liability has been recognised applying another Australian Accounting Standard) before the transition date that are allocated to the group (see paragraph C17A).
(d) if (a)–(c) result in a contractual service margin – minus the amount of the contractual service margin that relates to services provided before that date. The total of (a)–(c) is a proxy for the total contractual service margin for all services to be provided under the group of contracts, ie before any amounts that would have been recognised in profit or loss for services provided. The entity shall estimate the amounts that would have been recognised in profit or loss for services provided by comparing the remaining coverage units at the transition date with the coverage units provided under the group of contracts before the transition date; or
(e) if (a)–(c) result in a loss component – adjust the loss component to nil and increase the liability for remaining coverage excluding the loss component by the same amount.
C17A To the extent permitted by paragraph C8, an entity shall apply paragraphs C14B‒C14D to recognise an asset for insurance acquisition cash flows, and any adjustment to the contractual service margin of a group of insurance contracts with direct participation features for insurance acquisition cash flows (see paragraph C17(c)(iv)).

Insurance finance income or expenses
C18 For groups of insurance contracts that, applying paragraph C10, include contracts issued more than one year apart:
(a) an entity is permitted to determine the discount rates at the date of initial recognition of a group specified in paragraphs B72(b)–B72(e)(ii) and the discount rates at the date of the incurred claim specified in paragraph B72(e)(iii) at the transition date instead of at the date of initial recognition or incurred claim.
(b) if an entity chooses to disaggregate insurance finance income or expenses between amounts included in profit or loss and amounts included in other comprehensive income applying paragraphs 88(b) or 89(b), the entity needs to determine the cumulative