IFRS 4 - Insurance Contracts
Financial Dictionary — IFRS & IAS Standards
Definition
IFRS 4 is an interim standard that introduced basic requirements for accounting for insurance contracts before the full model in IFRS 17. It allowed many existing practices but required certain disclosures and tests for adequacy of insurance liabilities.
Use cases, Example & Why it matters
Use cases
- Used when applying IFRS/IAS requirements for recognition, measurement, presentation, or disclosure.
- Used to justify accounting treatments in working papers and financial statement notes.
- Used to justify accounting treatments in working papers and financial statement notes.
Example
- Example: When preparing year-end reporting, management applies **IFRS 4 - Insurance Contracts** to determine the correct IFRS treatment and disclosures.
Why it matters
- Why it matters: Ensures compliance with IFRS, improves comparability across periods and entities, and reduces financial reporting risk.