On 12 August 2024, the Ministry of Corporate Affairs (MCA), vide the Companies (Indian Accounting Standards) Amendment Rules, 2024 (Ind AS amendment rules) had notified Ind AS 117, Insurance Contracts, which is converged with IFRS 17, Insurance Contracts. The Ind AS amendment rules also omitted Ind AS 104, Insurance Contracts4 Ind AS 104, Insurance contracts, prescribed the financial reporting framework under Ind AS by insurance companies. .
However, given the significant changes in Ind AS 117 as compared to Ind AS 104, MCA, vide the Companies (Indian Accounting Standards) Third Amendment Rules, 2024 notified on 28 September 2024 (Ind AS third amendment rules), has clarified that an insurer or insurance company may continue to provide its Ind AS financial statement as per Ind AS 104 for the purposes of consolidation by its parent or investor or venturer till the Insurance Regulatory and Development Authority of India (IRDAI) has notified Ind AS 117. The Ind AS third amendment rules have also provided the text of Ind AS 104 as a schedule.
To access the text of the Ind AS third amendment rules, please click here
Action points for auditors
- While there has been a deferral in the adoption of Ind AS 117 for insurance companies, it’s a matter of time, it would be implemented. Accordingly, auditors should liaise with insurance companies and encourage them to develop plans for implementation of Ind AS 117. Plans should include developing appropriate systems and processes and training staff on the principles enunciated by Ind AS 117.