Last September the International Accounting Standards Board (IASB) issued Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4), with the aim of addressing concerns related to the misalignment of the effective dates of IFRS 9 and the future insurance contracts standard.

Now EFRAG has submitted its endorsement advice relating to the amendments for use in the EU and European Economic Area.

EFRAG assesses that, in the specific circumstances arising from the misalignment of effective dates, the amendments meet all technical endorsement criteria of the IAS Regulation. EFRAG further assesses that the amendments take account of the main concerns of entities whose activities are predominantly related to insurance, who are the most significantly affected by the issues arising from the misalignment of the effective dates of IFRS 9 and the forthcoming insurance contracts standard.

However, EFRAG has also said that it considers that the amendments do not address the cost concerns of many entities undertaking insurance activities that are not predominant insurers. EFRAG could not exclude that the amendments could create a competition issue, but says it is not in a position to conclude on whether this is material from an economic perspective.

EFRAG’s endorsement advice letter to the European Commission is here.