Changes in accounting policy, Current market interest rates...

Accounting policy changes

33.5. The insurer has the right to change its accounting policy with respect to insurance contracts only if such a change contributes to the value of financial statements for users. In doing so, the insurer follows the criteria set out in IFRS 8. The policyholder changes the accounting policy for insurance contracts, proving that the result of such changes will result in a more complete compliance of the financial statements with the criteria set forth in IFRS 8, but the change may not provide full compliance with such criteria. The following is a series of specific questions:

• current market interest rates;

• further application of existing methods;

• conservatism (prudence);

• future investment returns;

• shadow accounting (adjustments of own funds).

Current market interest rates

33.6. The insurer has the right (but not the obligation) to change its accounting policy in such a way as to provide reassessment of certain insurance liabilities taking into account current interest rates and to reflect changes in the value of such liabilities in the income statement. Insurance liabilities include related deferred acquisition costs and related intangible assets. The insurer is also entitled to adopt accounting policy provisions that provide for other current settlements (and assumptions) with respect to certain liabilities. The possibility of such a choice implies the insurer's right to change its policy with respect to certain obligations without applying such a policy consistently in respect of all such obligations, as otherwise required by IFRS 8. If the insurer specifies the obligations for which he intends to exercise his right of choice, he still applies interest rates (and, if necessary, other current calculations and assumptions) consistently for all periods, to all such obligations you until their termination.

Further application of existing methods

33.7. The insurer has the right to continue using the following methods (the use of any of them is not allowed for the first time):

• evaluation of insurance liabilities without discounting;

• evaluation of contractual rights to future management fees for investments in excess of their fair value (assumed based on comparison with the amount of remuneration currently charged by others for the provision of similar services). It is very likely that the fair value is initially equal to the costs incurred to create the right (except in cases where the future investment management fee and associated costs are not comparable to the average market values);

• use of different accounting policies with respect to insurance contracts (as well as associated deferred acquisition costs and related intangible assets - if any) of subsidiaries. If such provisions of the accounting policy are not uniform, the policyholder has the right to change them, if such a change does not lead to an even greater heterogeneity in the provisions of the accounting policy and is consistent with the other requirements of this IFRS.

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