Eligibility for the premium allocation approach or the variable fee approach, liability for remaining coverage, revenue of the period and entries

• Group of contracts: portfolio, recognition date, contracts concerned

  TextRequired

  ONE_YEAR_TRAVEL_CONTRACTS_ISSUED_ON_1_OCTOBER_20X6

• Coverage period of each contract and variability of the flows expected at inception

  Text

  TWELVE_MONTH_COVERAGE_AND_ACQUISITION_CASH_FLOWS_EXPENSED

• Participation clauses: underlying items, share of the policyholder, variation of the amounts paid

  Text

• Premium received at initial recognition

  Number

  120,000

• Acquisition cash flows deducted from the liability (zero if expensed)

  Number

  0

• Acquisition cash flows expensed at inception

  Number

  12,000

• Premium of the coverage period to allocate over time

  Number

  120,000

• Months of coverage elapsed at the closing date

  Number

  3 months

• Closing liability per the accounting records

  Number

  90,000

• Fair value of the underlying items at the opening date

  Number

• Fair value of the underlying items at the closing date

  Number

• Entity's share of the change in fair value (%)

  Number

• Adverse change in the flows relating to future service

  Number

• Documents obtained and referenced (contract terms, note on the variability of the flows, participation clauses, premium statement)

  EvidenceRequired

IFRS 17 §53IFRS 17 §B101

• Points examined: eligibility conditions and simplified measurement

  ChecklistRequired

  • Premium allocation approach: no material difference expected from the general model, or coverage period of one year or less
  • Eligibility assessed at the inception of the group
  • Variable fee approach: identified pool of underlying items, substantial share of the returns, substantial variation of the amounts paid
  • Criteria of the variable fee approach assessed at the inception of the contract
  • Expensing of acquisition cash flows when the coverage period is one year or less

IFRS 17 §53IFRS 17 §B101

• Initial liability for remaining coverage (premium received − acquisition cash flows deducted)

  Calculation

  120,000

  Premium received at initial recognition ; − Acquisition cash flows deducted from the liability (zero if expensed)

• Revenue of the period (premium × months elapsed ÷ 12, allocation over time)

  Calculation

  30,000

  Premium of the coverage period to allocate over time ; Months of coverage elapsed at the closing date

• Closing liability (initial liability − revenue of the period)

  Calculation

  90,000

  Initial liability for remaining coverage (premium received − acquisition cash flows deducted) ; − Revenue of the period (premium × months elapsed ÷ 12, allocation over time) ; Closing liability per the accounting records

• Change in the fair value of the underlying items (closing − opening)

  Calculation

  0

  Fair value of the underlying items at the closing date ; − Fair value of the underlying items at the opening date

• Entity's share of the change (change × share)

  Calculation

  Change in the fair value of the underlying items (closing − opening) ; Entity's share of the change in fair value (%)

• Net adjustment of the margin (entity's share − adverse change in the flows relating to future service)

  Calculation

  0

  Entity's share of the change (change × share) ; − Adverse change in the flows relating to future service

• Entry of the premium received

  Entry

  Account	Debit	Credit
  Cash: premium received	120,000
  Insurance contract liability		120,000

• Entry of the revenue of the period

  Entry

  Account	Debit	Credit
  Insurance contract liability	30,000
  Insurance revenue		30,000

• Entry of the acquisition cash flows expensed

  Entry

  Account	Debit	Credit
  Insurance service expenses	12,000
  Cash paid		12,000

IFRS 17 §53IFRS 17 §B101

• Eligibility for the premium allocation approach

  JudgmentRequired

  Eligible: coverage period of one year or less

  Eligible: coverage period of one year or less / Eligible: no material difference expected from the general model / Not eligible: general model / Not applicable

  Professional judgment: the reasonable expectation of no material difference is assessed at the inception of the group; a high expected variability of the flows calls it into question.

• Rationale: coverage period, expected variability of the flows, comparison with the general model (case data)

  Text

  COVERAGE_PERIOD_OF_EACH_CONTRACT_IS_TWELVE_MONTHS

• Eligibility for the variable fee approach

  JudgmentRequired

  Not applicable

  Three criteria met: variable fee approach / Criteria not met: general model / Not applicable

  Professional judgment: "substantial" is assessed on the clauses of the contract; no percentage is presented here as imposed by the standard.

• Rationale: underlying items, substantial share of the returns, variation of the amounts paid

  Text

IFRS 17 §53IFRS 17 §B101

• Information to prepare on the simplified approaches

  Checklist

  • Approach applied to each group and reason for the eligibility
  • Reconciliation of the liability for remaining coverage

• Effect derived from the entries

  Table

• Normative references cited in this workpaper

  References

• Group describedPass
• Eligibility for the premium allocation approach judged and supportedPass
• Eligibility for the variable fee approach judged and supportedPass
• Recomputed liability = liability in the accounting recordsPass
• Premium entry balancedPass
• Revenue entry balancedPass
• Acquisition entry balancedPass

Assets

108,000

Liabilities

90,000

Profit or loss

18,000

OCI

0

Equity

18,000

• Group of contracts: portfolio, recognition date, contracts concerned

  TextRequired

  THREE_YEAR_PROTECTION_CONTRACTS_WITH_AN_INDEXATION_CLAUSE

• Coverage period of each contract and variability of the flows expected at inception

  Text

  THIRTY_SIX_MONTH_COVERAGE_AND_HIGH_VARIABILITY_OF_THE_FLOWS

• Participation clauses: underlying items, share of the policyholder, variation of the amounts paid

  Text

• Premium received at initial recognition

  Number

• Acquisition cash flows deducted from the liability (zero if expensed)

  Number

• Acquisition cash flows expensed at inception

  Number

• Premium of the coverage period to allocate over time

  Number

• Months of coverage elapsed at the closing date

  Number

• Closing liability per the accounting records

  Number

• Fair value of the underlying items at the opening date

  Number

• Fair value of the underlying items at the closing date

  Number

• Entity's share of the change in fair value (%)

  Number

• Adverse change in the flows relating to future service

  Number

• Documents obtained and referenced (contract terms, note on the variability of the flows, participation clauses, premium statement)

  EvidenceRequired

IFRS 17 §53IFRS 17 §B101

• Points examined: eligibility conditions and simplified measurement

  ChecklistRequired

  • Premium allocation approach: no material difference expected from the general model, or coverage period of one year or less
  • Eligibility assessed at the inception of the group
  • Variable fee approach: identified pool of underlying items, substantial share of the returns, substantial variation of the amounts paid
  • Criteria of the variable fee approach assessed at the inception of the contract
  • Expensing of acquisition cash flows when the coverage period is one year or less

IFRS 17 §53IFRS 17 §B101

• Initial liability for remaining coverage (premium received − acquisition cash flows deducted)

  Calculation

  0

  Premium received at initial recognition ; − Acquisition cash flows deducted from the liability (zero if expensed)

• Revenue of the period (premium × months elapsed ÷ 12, allocation over time)

  Calculation

  Premium of the coverage period to allocate over time ; Months of coverage elapsed at the closing date

• Closing liability (initial liability − revenue of the period)

  Calculation

  Initial liability for remaining coverage (premium received − acquisition cash flows deducted) ; − Revenue of the period (premium × months elapsed ÷ 12, allocation over time) ; Closing liability per the accounting records

• Change in the fair value of the underlying items (closing − opening)

  Calculation

  0

  Fair value of the underlying items at the closing date ; − Fair value of the underlying items at the opening date

• Entity's share of the change (change × share)

  Calculation

  Change in the fair value of the underlying items (closing − opening) ; Entity's share of the change in fair value (%)

• Net adjustment of the margin (entity's share − adverse change in the flows relating to future service)

  Calculation

  0

  Entity's share of the change (change × share) ; − Adverse change in the flows relating to future service

• Entry of the premium received

  Entry

  Debit Cash: premium received ← Premium received at initial recognition ; Credit Insurance contract liability ← Premium received at initial recognition

• Entry of the revenue of the period

  Entry

  Debit Insurance contract liability ← Revenue of the period (premium × months elapsed ÷ 12, allocation over time) ; Credit Insurance revenue ← Revenue of the period (premium × months elapsed ÷ 12, allocation over time)

• Entry of the acquisition cash flows expensed

  Entry

  Debit Insurance service expenses ← Acquisition cash flows expensed at inception ; Credit Cash paid ← Acquisition cash flows expensed at inception

IFRS 17 §53IFRS 17 §B101

• Eligibility for the premium allocation approach

  JudgmentRequired

  Not eligible: general model

  Eligible: coverage period of one year or less / Eligible: no material difference expected from the general model / Not eligible: general model / Not applicable

  Professional judgment: the reasonable expectation of no material difference is assessed at the inception of the group; a high expected variability of the flows calls it into question.

• Rationale: coverage period, expected variability of the flows, comparison with the general model (case data)

  Text

  COVERAGE_ABOVE_ONE_YEAR_AND_THE_SIMPLIFIED_LIABILITY_WOULD_DIFFER_MATERIALLY_IN_THREE_SCENARIOS_OF_FIVE

• Eligibility for the variable fee approach

  JudgmentRequired

  Not applicable

  Three criteria met: variable fee approach / Criteria not met: general model / Not applicable

  Professional judgment: "substantial" is assessed on the clauses of the contract; no percentage is presented here as imposed by the standard.

• Rationale: underlying items, substantial share of the returns, variation of the amounts paid

  Text

IFRS 17 §53IFRS 17 §B101

• Information to prepare on the simplified approaches

  Checklist

  • Approach applied to each group and reason for the eligibility
  • Reconciliation of the liability for remaining coverage

• Effect derived from the entries

  Table

• Normative references cited in this workpaper

  References

• Group describedPass
• Eligibility for the premium allocation approach judged and supportedPass
• Eligibility for the variable fee approach judged and supportedPass
• Recomputed liability = liability in the accounting recordsNot evaluated
• Premium entry balancedNot evaluated
• Revenue entry balancedNot evaluated
• Acquisition entry balancedNot evaluated

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Group of contracts: portfolio, recognition date, contracts concerned

  TextRequired

  SAVINGS_CONTRACTS_WITH_PARTICIPATION_IN_A_FUND

• Coverage period of each contract and variability of the flows expected at inception

  Text

• Participation clauses: underlying items, share of the policyholder, variation of the amounts paid

  Text

  FUND_OF_ASSETS_IDENTIFIED_AND_90_PERCENT_OF_THE_RETURNS_PAID_TO_THE_POLICYHOLDER

• Premium received at initial recognition

  Number

• Acquisition cash flows deducted from the liability (zero if expensed)

  Number

• Acquisition cash flows expensed at inception

  Number

• Premium of the coverage period to allocate over time

  Number

• Months of coverage elapsed at the closing date

  Number

• Closing liability per the accounting records

  Number

• Fair value of the underlying items at the opening date

  Number

  5,000,000

• Fair value of the underlying items at the closing date

  Number

  5,200,000

• Entity's share of the change in fair value (%)

  Number

  10 %

• Adverse change in the flows relating to future service

  Number

  4,000

• Documents obtained and referenced (contract terms, note on the variability of the flows, participation clauses, premium statement)

  EvidenceRequired

IFRS 17 §53IFRS 17 §B101

• Points examined: eligibility conditions and simplified measurement

  ChecklistRequired

  • Premium allocation approach: no material difference expected from the general model, or coverage period of one year or less
  • Eligibility assessed at the inception of the group
  • Variable fee approach: identified pool of underlying items, substantial share of the returns, substantial variation of the amounts paid
  • Criteria of the variable fee approach assessed at the inception of the contract
  • Expensing of acquisition cash flows when the coverage period is one year or less

IFRS 17 §53IFRS 17 §B101

• Initial liability for remaining coverage (premium received − acquisition cash flows deducted)

  Calculation

  0

  Premium received at initial recognition ; − Acquisition cash flows deducted from the liability (zero if expensed)

• Revenue of the period (premium × months elapsed ÷ 12, allocation over time)

  Calculation

  Premium of the coverage period to allocate over time ; Months of coverage elapsed at the closing date

• Closing liability (initial liability − revenue of the period)

  Calculation

  Initial liability for remaining coverage (premium received − acquisition cash flows deducted) ; − Revenue of the period (premium × months elapsed ÷ 12, allocation over time) ; Closing liability per the accounting records

• Change in the fair value of the underlying items (closing − opening)

  Calculation

  200,000

  Fair value of the underlying items at the closing date ; − Fair value of the underlying items at the opening date

• Entity's share of the change (change × share)

  Calculation

  20,000

  Change in the fair value of the underlying items (closing − opening) ; Entity's share of the change in fair value (%)

• Net adjustment of the margin (entity's share − adverse change in the flows relating to future service)

  Calculation

  16,000

  Entity's share of the change (change × share) ; − Adverse change in the flows relating to future service

• Entry of the premium received

  Entry

  Debit Cash: premium received ← Premium received at initial recognition ; Credit Insurance contract liability ← Premium received at initial recognition

• Entry of the revenue of the period

  Entry

  Debit Insurance contract liability ← Revenue of the period (premium × months elapsed ÷ 12, allocation over time) ; Credit Insurance revenue ← Revenue of the period (premium × months elapsed ÷ 12, allocation over time)

• Entry of the acquisition cash flows expensed

  Entry

  Debit Insurance service expenses ← Acquisition cash flows expensed at inception ; Credit Cash paid ← Acquisition cash flows expensed at inception

IFRS 17 §53IFRS 17 §B101

• Eligibility for the premium allocation approach

  JudgmentRequired

  Not applicable

  Eligible: coverage period of one year or less / Eligible: no material difference expected from the general model / Not eligible: general model / Not applicable

  Professional judgment: the reasonable expectation of no material difference is assessed at the inception of the group; a high expected variability of the flows calls it into question.

• Rationale: coverage period, expected variability of the flows, comparison with the general model (case data)

  Text

• Eligibility for the variable fee approach

  JudgmentRequired

  Three criteria met: variable fee approach

  Three criteria met: variable fee approach / Criteria not met: general model / Not applicable

  Professional judgment: "substantial" is assessed on the clauses of the contract; no percentage is presented here as imposed by the standard.

• Rationale: underlying items, substantial share of the returns, variation of the amounts paid

  Text

  THE_THREE_CRITERIA_ARE_MET_AT_INCEPTION

IFRS 17 §53IFRS 17 §B101

• Information to prepare on the simplified approaches

  Checklist

  • Approach applied to each group and reason for the eligibility
  • Reconciliation of the liability for remaining coverage

• Effect derived from the entries

  Table

• Normative references cited in this workpaper

  References

• Group describedPass
• Eligibility for the premium allocation approach judged and supportedPass
• Eligibility for the variable fee approach judged and supportedPass
• Recomputed liability = liability in the accounting recordsNot evaluated
• Premium entry balancedNot evaluated
• Revenue entry balancedNot evaluated
• Acquisition entry balancedNot evaluated

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Group of contracts: portfolio, recognition date, contracts concerned

  TextRequired

  ONE_YEAR_TRAVEL_CONTRACTS_ISSUED_ON_1_NOVEMBER_20X6

• Coverage period of each contract and variability of the flows expected at inception

  Text

  TWELVE_MONTH_COVERAGE_AND_ACQUISITION_CASH_FLOWS_EXPENSED

• Participation clauses: underlying items, share of the policyholder, variation of the amounts paid

  Text

• Premium received at initial recognition

  Number

  24,000

• Acquisition cash flows deducted from the liability (zero if expensed)

  Number

  0

• Acquisition cash flows expensed at inception

  Number

  2,400

• Premium of the coverage period to allocate over time

  Number

  24,000

• Months of coverage elapsed at the closing date

  Number

  2 months

• Closing liability per the accounting records

  Number

  20,000

• Fair value of the underlying items at the opening date

  Number

• Fair value of the underlying items at the closing date

  Number

• Entity's share of the change in fair value (%)

  Number

• Adverse change in the flows relating to future service

  Number

• Documents obtained and referenced (contract terms, note on the variability of the flows, participation clauses, premium statement)

  EvidenceRequired

IFRS 17 §53IFRS 17 §B101

• Points examined: eligibility conditions and simplified measurement

  ChecklistRequired

  • Premium allocation approach: no material difference expected from the general model, or coverage period of one year or less
  • Eligibility assessed at the inception of the group
  • Variable fee approach: identified pool of underlying items, substantial share of the returns, substantial variation of the amounts paid
  • Criteria of the variable fee approach assessed at the inception of the contract
  • Expensing of acquisition cash flows when the coverage period is one year or less

IFRS 17 §53IFRS 17 §B101

• Initial liability for remaining coverage (premium received − acquisition cash flows deducted)

  Calculation

  24,000

  Premium received at initial recognition ; − Acquisition cash flows deducted from the liability (zero if expensed)

• Revenue of the period (premium × months elapsed ÷ 12, allocation over time)

  Calculation

  4,000

  Premium of the coverage period to allocate over time ; Months of coverage elapsed at the closing date

• Closing liability (initial liability − revenue of the period)

  Calculation

  20,000

  Initial liability for remaining coverage (premium received − acquisition cash flows deducted) ; − Revenue of the period (premium × months elapsed ÷ 12, allocation over time) ; Closing liability per the accounting records

• Change in the fair value of the underlying items (closing − opening)

  Calculation

  0

  Fair value of the underlying items at the closing date ; − Fair value of the underlying items at the opening date

• Entity's share of the change (change × share)

  Calculation

  Change in the fair value of the underlying items (closing − opening) ; Entity's share of the change in fair value (%)

• Net adjustment of the margin (entity's share − adverse change in the flows relating to future service)

  Calculation

  0

  Entity's share of the change (change × share) ; − Adverse change in the flows relating to future service

• Entry of the premium received

  Entry

  Account	Debit	Credit
  Cash: premium received	24,000
  Insurance contract liability		24,000

• Entry of the revenue of the period

  Entry

  Account	Debit	Credit
  Insurance contract liability	4,000
  Insurance revenue		4,000

• Entry of the acquisition cash flows expensed

  Entry

  Account	Debit	Credit
  Insurance service expenses	2,400
  Cash paid		2,400

IFRS 17 §53IFRS 17 §B101

• Eligibility for the premium allocation approach

  JudgmentRequired

  Eligible: coverage period of one year or less

  Eligible: coverage period of one year or less / Eligible: no material difference expected from the general model / Not eligible: general model / Not applicable

  Professional judgment: the reasonable expectation of no material difference is assessed at the inception of the group; a high expected variability of the flows calls it into question.

• Rationale: coverage period, expected variability of the flows, comparison with the general model (case data)

  Text

  COVERAGE_PERIOD_OF_EACH_CONTRACT_IS_TWELVE_MONTHS

• Eligibility for the variable fee approach

  JudgmentRequired

  Not applicable

  Three criteria met: variable fee approach / Criteria not met: general model / Not applicable

  Professional judgment: "substantial" is assessed on the clauses of the contract; no percentage is presented here as imposed by the standard.

• Rationale: underlying items, substantial share of the returns, variation of the amounts paid

  Text

IFRS 17 §53IFRS 17 §B101

• Information to prepare on the simplified approaches

  Checklist

  • Approach applied to each group and reason for the eligibility
  • Reconciliation of the liability for remaining coverage

• Effect derived from the entries

  Table

• Normative references cited in this workpaper

  References

• Group describedPass
• Eligibility for the premium allocation approach judged and supportedPass
• Eligibility for the variable fee approach judged and supportedPass
• Recomputed liability = liability in the accounting recordsPass
• Premium entry balancedPass
• Revenue entry balancedPass
• Acquisition entry balancedPass

Assets

21,600

Liabilities

20,000

Profit or loss

1,600

OCI

0

Equity

1,600