IFRS 17Chapter 6Lesson 1
Contracts with direct participation features and the variable fee approach
Step 1 of 6Learning objectives
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A contract that gives the policyholder a share in an identified pool of underlying items falls under direct participation; the entity’s share of their value adjusts the margin.
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Learning objectives
- List the three criteria of a contract with direct participation features.
- Determine, from the terms of a case, whether a contract meets the three criteria.
- Explain that the margin absorbs the change in the entity’s share of the underlying items.