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IFRS 17Workpapers (Step 4 of 5)

Workpaper assignment

Step 4 of 5
Mission · workpaperWorkpaper · IFRS 17L4 · Expert

Documents

Company profile and case conventions

Memo

Company profile and case conventions

Sorvalis Assurances SA (fictitious entity) closes its accounts on 31 December 20X6, in EUR. Case conventions (pedagogical assumptions, not attributed to IFRS 17): annual discount rate of 5% for all flows, flows at year end, each flow discounted separately; risk adjustment given; share of 50% of the coverage units for the first year of group G1; acquisition cash flows of G3 expensed; the claims of G1 for the year are as expected; the entry of each group is illustrative. For G1, the six entries of the file record only the first premium flow and the release of the margin: claims, the release of the risk adjustment and the unwinding of the discount (including the interest on the margin, EUR 850) have no entry in the file.

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

File on a group of insurance contracts: aggregation, initial measurement, contractual service margin, simplified approach and presentation (IFRS 17)

7 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
Expert
Estimated time
≈ 90 min
Progress
0 / 5 steps done (review excluded)

Context

Sorvalis Assurances SA (fictitious entity) closes its accounts on 31 December 20X6; the financial statements will be authorised for issue on 28 February 20X7. The preparer builds the file for the first application of IFRS 17 for the group protection portfolio (two groups) and for a one-year travel insurance group. The file is reviewed by a reviewer before sign-off. Teaching simulation: the review trail of the file (preparation, reviewer notes and final sign-off) is simulated for demonstration purposes; it is neither a real review nor a validation of the content.

Assignment

Initial measurement of G1

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

  • G1: discount each outflow.
  • G1: discount the premium receivable.
  • G1: compute the discounted net outflow before risk adjustment.
  • G1: compute the fulfilment cash flows.
  • G1: compute the initial contractual service margin.
  • G1: record the premium received and the liability.

Documents in the file

Open the documents to pick out the relevant information.

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