Document ID: chunk:federal_register_of_legislation:F2021C00205:body:0:p18
Version: federal_register_of_legislation:F2021C00205
Segment Type: other
Provision Reference: 
Character Range: 45464–48375

designation shall be its new amortised cost carrying amount; and
(b) the effective interest rate shall be determined based on its fair value at the date of designation.
35I An entity shall continue to apply the overlay approach to a designated financial asset until that financial asset is derecognised. However, an entity:
(a) shall de-designate a financial asset when the financial asset no longer meets the criterion in paragraph 35E(b). For example, a financial asset will no longer meet that criterion when an entity transfers that asset so that it is held in respect of its banking activities or when an entity ceases to be an insurer.
(b) may, at the beginning of any annual period, stop applying the overlay approach to all designated financial assets. An entity that elects to stop applying the overlay approach shall apply AASB 108 to account for the change in accounting policy.
35J When an entity de-designates a financial asset applying paragraph 35I(a), it shall reclassify from accumulated other comprehensive income to profit or loss as a reclassification adjustment (see AASB 101) any balance relating to that financial asset.
35K If an entity stops using the overlay approach applying the election in paragraph 35I(b) or because it is no longer an insurer, it shall not subsequently apply the overlay approach. An insurer that has elected to apply the overlay approach (see paragraph 35C) but has no eligible financial assets (see paragraph 35E) may subsequently apply the overlay approach when it has eligible financial assets.

Interaction with other requirements
35L Paragraph 30 of this Standard permits a practice that is sometimes described as 'shadow accounting'. If an insurer applies the overlay approach, shadow accounting may be applicable.
35M Reclassifying an amount between profit or loss and other comprehensive income applying paragraph 35B may have consequential effects for including other amounts in other comprehensive income, such as income taxes. An insurer shall apply the relevant Standard, such as AASB 112 Income Taxes, to determine any such consequential effects.

First-time adopter
35N If a first-time adopter elects to apply the overlay approach, it shall restate comparative information to reflect the overlay approach if, and only if, it restates comparative information to comply with AASB 9 (see paragraphs E1–E2 of AASB 1).

Disclosure

Explanation of recognised amounts
36 An insurer shall disclose information that identifies and explains the amounts in its financial statements arising from insurance contracts.
37 To comply with paragraph 36, an insurer shall disclose:
(a) its accounting policies for insurance contracts and related assets, liabilities, income and expense.
(b) the recognised assets, liabilities, income and expense (and, if it presents its statement of cash flows using the direct method, cash flows) arising from insurance contracts.