Document ID: chunk:federal_register_of_legislation:F2023L00015:reg:21:p90
Version: federal_register_of_legislation:F2023L00015
Segment Type: reg
Provision Reference: reg 21 (pt 90/101)
Character Range: 280368–283563

joint ventures and associates.

     BC301        The Boards acknowledged that the AASB 1023/PBE IFRS 4 requirements were based on a view that fair value accounting for investments would provide the greatest level of balance sheet and income statement consistency with the measurement of insurance liabilities, which is largely a current value basis.

     BC302        The Boards noted that, unlike AASB 1023/PBE IFRS 4, IFRS 17 is a global Standard, and asset measurement and reporting practices (other than fair value through profit or loss) may emerge within the insurance industry globally, which Australian and New Zealand insurers should be able to follow.

     BC303        The Boards noted that, in stakeholder consultation conducted for this project in 2020-21, the following themes emerged.

          (a)                    Most public sector entities do not determine their own accounting policies, particularly in relation to policies for transactions that are common across the public sector – those policies are determined by the Treasury office of their jurisdiction.

          (b)                   The established practice is to apply fair value through profit or loss accounting to assets when feasible and this shows no sign of changing.

          (c)                    Many public sector entity investments are managed separately by a specialist public sector funds management entity. Those funds management entities ordinarily hold assets for trading and apply fair value through profit or loss accounting. Most funds management entities typically only supply fair value information to their unitholders.

Boards' position on measurement of investments backing insurance liabilities in AASB ED 319/NZASB ED 2022-3

     BC304        The Boards considered that:

          (a) in practical terms, there are strong existing incentives for public sector entities to apply fair value through profit or loss accounting;

          (b) in broad terms, the general application of fair value through profit or loss accounting to investments backing insurance liabilities is probably the most useful approach to meet the needs of public sector users of the financial statements; and

          (c) all the relevant public sector entities are likely to voluntarily continue applying fair value through profit or loss accounting.

     BC305        The Boards decided that they would not propose carrying forward into AASB 17/PBE IFRS 17 the modifications on investment measurement from AASB 1023/PBE IFRS 4 for public sector entities.

Measurement of investments backing insurance liabilities – AASB ED 319/NZASB ED 2022-3 feedback and Boards' conclusion

     BC306        There was no specific feedback from respondents to AASB ED 319/NZASB ED 2022-3 on measurement of investments backing insurance liabilities. The Boards concluded that it is not appropriate to have public sector modifications on the measurement of investments backing insurance liabilities in the context of AASB 17/PBE IFRS 17.

     BC307        The Boards noted informal feedback suggesting public sector entities with arrangements that might fall within the scope of AASB 17/PBE IFRS 17 would typically