Accounting

Key transformations of fundamental accounting rules for companies reporting under International Financial Reporting Standards (IFRS) are currently underway. The changes are intended to create accounting standards that are strong, consistent and workable and that increase the transparency and comparability of financial statements under IFRS.

Insurers are some of the largest institutional investors in Europe and financial instruments account for the vast majority of the asset side of insurers' balance sheets. The current work to replace the international accounting standard for financial instruments (IAS 39) with IFRS 9 is therefore of significant importance for the CEA.

There is currently no proper IFRS for valuing insurance contracts in the financial statements of insurance companies.  The current standard, IFRS 4 introduced in 2004, is only an interim standard to enable European insurers to be IFRS-compliant for their consolidated accounts. The CEA is therefore closely involved in the ongoing work to create a final standard, IFRS 4 Phase II, for insurance contracts.

As the IASB issues new standards, the European Commission needs to consider their endorsement into European law. The CEA is active in this process, which also involves contributions to the European Financial Reporting Advisory Group.