Document ID: chunk:federal_register_of_legislation:F2023L00015:reg:21:p11
Version: federal_register_of_legislation:F2023L00015
Segment Type: reg
Provision Reference: reg 21 (pt 11/101)
Character Range: 60506–63523

2018, the NZASB considered the application of the Policy Approach to Developing the Suite of PBE Standards (PBE Policy Approach) and decided to develop PBE IFRS 17. The trigger in the PBE Policy Approach for developing PBE IFRS 17 is the change to an IFRS Standard (IFRS 4 is superseded by IFRS 17) that has been used as the basis for a PBE Standard.

          (d) A further motivation for developing PBE IFRS 17 was to address arrangements that are eligible to apply the insurance approach as permitted under IPSAS 42 Social Benefits [PBE IFRS 17.BC5].[2] (The insurance approach would involve applying IFRS 17 [IPSAS 42.AG19].)

Consistency in financial reporting – within and between jurisdictions

     BC12            The proposals in AASB Discussion Paper Australian-specific Insurance Issues – Regulatory Disclosures and Public Sector Entities (2017) identified as an objective "to achieve greater consistency of financial reporting across the public sector among entities engaging in insurance activities for the benefit of users of that information" [page 6]. While the NZASB has fewer public sector stakeholders with arrangements that might be accounted for as insurance contracts, consistency remains a key issue.

     BC13            Although there is no binding agreement in place regarding public sector entities, to the extent feasible the Boards consider it would be desirable to have the same insurance Accounting Standards applying in Australia and New Zealand. This is because, for example, there can be useful benchmarking of financial position and performance of public sector entities between the two jurisdictions. Accordingly, the Boards consider that it is beneficial to have achieved a consistent outcome in the two jurisdictions such that AASB 17 and PBE IFRS 17 contain the same public sector modifications.

     BC14            The public sector modifications to AASB 17/PBE IFRS 17 resulted from a wide-ranging due process that included:

          (a) the AASB and NZASB issuing AASB ED 319 Insurance Contracts in the Public Sector and NZASB ED 2022-3 Insurance Contracts in the Public Sector in March 2022, which had the same technical content;

          (b) the AASB and NZASB issuing a Draft Standard of the amendments to AASB 17/PBE IFRS 17 (and, in the case of the AASB only, AASB 1050 Administered Items) in October 2022 for fatal flaw comment;

          (c) direct stakeholder outreach, including consulting the Public Sector Focus Group, a sub-group of the Transition Resource Group for AASB 17 Insurance Contracts, which includes members from both jurisdictions;

          (d) the AASB issuing Discussion Paper Australian-specific Insurance Issues – Regulatory Disclosures and Public Sector Entities in 2017; and

          (e) the NZASB issuing Exposure Draft ED 2018-7 PBE IFRS 17 Insurance Contracts in 2018.

     Both Boards have considered respondents' feedback from all of the above consultations.

     BC15            The main focus of this Basis for Conclusions