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IFRS 17Workpapers (Step 4 of 5)

Workpaper assignment

Step 4 of 5
Mission · workpaperWorkpaper · IFRS 17L3 · Advanced

Documents

Company profile and case conventions

Memo

Company profile and case conventions

Lorvane Assurances SA (fictitious entity) issues two-year group protection contracts. Initial recognition takes place on 1 January 20X6, the start of coverage. Case conventions (pedagogical assumptions, not attributed to IFRS 17): amounts in EUR; flows at year end; each flow discounted separately; acquisition commissions included in the flows of the group and paid at the end of the first year; no flow before recognition and no currency effect.

Initial measurement of a group: present values of the flows, fulfilment cash flows, contractual service margin or loss, and recognition entry: Group A

Initial measurement of a group: fulfilment cash flows, risk adjustment, contractual service margin and onerous group

6 documents9 sections to document
0 / 6 sections completed
Guided mode

Section 1 of 9

Objective

In progress
Section brief
What to document
The engagement, its scope and the working mode chosen.
Why
A workpaper answers one precise question: framing it avoids off-topic work.
How
Read the objective and the assignment, then choose the mode (guided, semi-guided, professional).
Expected result
You know which question the workpaper must settle, and for which reporting date.
Your role
Preparer of the IFRS 17 workpaper
Level
Advanced
Estimated time
≈ 90 min
Progress
0 / 5 steps done (review excluded)

Context

Lorvane Assurances SA (fictitious entity) issued on 1 January 20X6 two groups of two-year group protection contracts: group A (the workshop sector) and group B (the shop sector). You prepare the measurement of each group at initial recognition.

Assignment

Initial measurement of groups A and B

Purpose of the workpaper

Record the future flows of the group, the discount rate and the risk adjustment for non-financial risk: they are case data. Discount each flow separately, total the discounted net outflow, add the risk adjustment to obtain the fulfilment cash flows, then derive the margin (never a profit at inception) or the loss of the onerous group. Record the matching entry and write the conclusion.

Questions of the file covered by this workpaper

  • Group A: discount each outflow.
  • Group A: discount the premium receivable.
  • Group A: compute the discounted net outflow before risk adjustment.
  • Group A: compute the fulfilment cash flows.
  • Group A: compute the initial contractual service margin.
  • Group A: compute any loss at initial recognition.
  • Group A: record the premium received and the liability.
  • Group B: discount each outflow.
  • Group B: discount the premium receivable.
  • Group B: compute the discounted net outflow before risk adjustment.
  • Group B: compute the fulfilment cash flows.
  • Group B: compute the initial contractual service margin.
  • Group B: compute the loss at initial recognition.
  • Group B: record the loss of the onerous group.

Documents in the file

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