IFRS 17 is the international accounting standard for insurance contracts that became effective for many companies on 1 January 2023.
The standard was issued by the International Accounting Standards Board to replace the previous patchwork of insurance-accounting practices under IFRS. It aims to make insurers’ obligations, profits, and risks more comparable across countries and products.
IFRS 17 generally requires insurers to measure groups of insurance contracts using discounted future cash flows, a risk adjustment, and a contractual service margin. The service margin represents unearned profit that is recognized as coverage is provided.
The standard is sometimes confused with IFRS 9, which primarily addresses financial instruments, and IFRS 15, which concerns revenue from contracts with customers. IFRS 17 is specifically focused on insurance contracts.