Insurance revenue

Learning objectives

• Explain that insurance revenue represents the consideration for the services provided in the period.L1
• Calculate the insurance revenue for a period under the premium allocation approach from a given allocation.L3

Normative references

• IFRS 17 §83An entity presents in profit or loss insurance revenue arising from the groups of contracts issued, depicting the provision of services at an amount that reflects the consideration to which it expects to be entitled.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

3 questions

• What does insurance revenue presented in profit or loss for groups of contracts issued reflect?L1
• Lagune SA applies the premium allocation approach to a group of twelve-month contracts that brings it {annual_premium} of premiums. Case convention: the provision of services is spread in proportion to the time elapsed. Calculate the insurance revenue of the first {months_first} months, then the cumulative revenue at the end of the first {months_second} months.L3
• An analyst presents as insurance revenue of the year the whole premium of 3,600 euros received at the issue of a three-year contract, writing: "The premium is received, so it is revenue for the year." What is the error in this reasoning?L3