As per circular dated 28th June 2017, IRDA points out stated that the effective date of implementation of Ind-AS in the insurance sector in India will be from FY20-21. Now as per the circular dated 21st January 2020, “…the circular dated June 28, 2017, hereby, stands withdrawn,”. The circular talks about deferment of date of implementation of Indian Accounting Standard (Ind-AS) for the insurance sector from FY20-21 till further notice.
In 2017 as well the implementation was deferred for the reason that the sector would have incurred twice the compliance costs of implementation and secondly, IFRS 17 (Insurance contract) was to be implemented in the country in 2020. However, it was informed by International Accounting Standards Board (IASB) that IFRS 17 will have to be amended due to the concerns raised around accounting treatments, operational complexity and implementation challenges raised by various stakeholders. Finality of the said IFRS can be expected till mid -2020. Therefore, in India the equivalent standard will be notified accordingly by the Ministry of Corporate Affairs (MCA), further delaying the implementation.
“Several other regulations that may be impacted due to the implementation of IFRS 17 may also have to be modified appropriately,” says the circular. It is the decision of IRDA that IFRS 17 and Ind AS 109 shall be implemented simultaneously along with other applicable Ind As.
The effective date of implementation shall be decided after the finalization of IFRS 17 by IASB.
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