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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

Tarvelle Assurances SA (fictitious entity) closes its accounts on 31 December 20X7, in EUR. Groups P and Q were recognised in 20X6. Case conventions (pedagogical assumptions, not attributed to IFRS 17): locked-in rate of 5% for group P and the portfolio, current rate of 6%; coverage unit: insured capital multiplied by the duration; the favourable change first reduces the loss component, within the limit of its balance; the liability is presented as a liability for remaining coverage and a liability for incurred claims.

Contractual service margin roll-forward: interest at the locked-in rate, changes relating to future service, release by coverage units and loss component: Group Q — loss component

Subsequent measurement: margin roll-forward, coverage units, loss component, insurance service result and finance expense

7 documents8 sections to document
0 / 5 sections completed
Guided mode

Section 1 of 8

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 / 4 steps done (review excluded)

Context

Tarvelle Assurances SA (fictitious entity) closes its accounts on 31 December 20X7. Two groups issued in 20X6 are to be followed: group P (protection, profitable) and group Q (property, onerous). You prepare the margin roll-forward, the reversal of the loss component, the insurance service result and the finance expense of the year.

Assignment

Margin roll-forward of group P and loss component of group Q

Purpose of the workpaper

Record the opening margin, the locked-in rate of the group, the changes relating to future service and the share of coverage units of the period: this share is case data. Compute the interest, the margin before release, the release and the closing margin, then record the release as insurance revenue. For an onerous group, compute the reversal of the loss component, capped at its balance. For proportionate cover of an onerous underlying group, compute the loss recovery; at transition, under the fair value approach, compute the margin as the fair value less the fulfilment cash flows (case data).

Questions of the file covered by this workpaper

  • Group P: compute the interest on the margin.
  • Group P: compute the margin before release.
  • Does the coverage unit used reflect the quantity of benefits and the expected coverage duration?
  • Group P: compute the release of the period.
  • Group P: compute the closing margin.
  • Record the release of the margin to insurance revenue.
  • Group Q: compute the reversal of the loss component.

Documents in the file

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