In September 2004 the International Financial Reporting Standard for Insurance Contracts (IFRS 4) was adopted by the European Commission and since 2005 it has became compulsory for all the European listed companies engaged in accounting for insurance contracts. This standard represents a “stepping stone” of the Insurance Contracts Project developed by IASB — now working on Phase II of such project — and it defines recognition, measurement and disclosure of insurance contracts. In particular, paragraphs 36 and 37 of IFRS 4 rule the disclosure of information that identifies and explains the amounts arising from insurance contracts and they are consequently destined to affect the disclosure practices in the insurers’ financial statements. The paper aims to verify whether the application of IFRS 4 to the financial statements of Italian insurers guarantees a complete disclosure about assets and liabilities related to the contracts containing a discretionary participation feature (DPF). In order to answer the research question, the following literature is considered: i) the one that has been exploring — and for a long time so — the specific characters of the insurers’ financial statements compliant with the Italian regulation; ii) the one that intercepts this topic verifying techniques and impacts of IFRSs adoption; iii) the one that measures the entities’ disclosure and seeks for its determinants. The research starts from an empirical analysis based on 2004 and 2005 financial reports of the Italian insurers and it is supported by documental analysis and interviews. The expected results — which will emerge by processing the collected data — are about a non complete disclosure of: a) the assets and liabilities related to DPF contracts; b) the reasons why “shadow accounting” arises and how it is measured; c) asymmetric changes in assets and liabilities related to DPF contracts that can affect equity and net earnings. In Italy, this topic came up for the first time in April 2006, when the 2005 financial statements were approved by shareholders, and since then it has been representing a new interesting field for empirical analysis. This study aims to contribute to the international debate on the application of IFRS by insurance companies, giving empirical evidence of the impact of these financial reporting standards on disclosure related to DPF contracts.

DPF Contracts Disclosure in Insurers’ Financial Statement

STACCHEZZINI, Riccardo
2007-01-01

Abstract

In September 2004 the International Financial Reporting Standard for Insurance Contracts (IFRS 4) was adopted by the European Commission and since 2005 it has became compulsory for all the European listed companies engaged in accounting for insurance contracts. This standard represents a “stepping stone” of the Insurance Contracts Project developed by IASB — now working on Phase II of such project — and it defines recognition, measurement and disclosure of insurance contracts. In particular, paragraphs 36 and 37 of IFRS 4 rule the disclosure of information that identifies and explains the amounts arising from insurance contracts and they are consequently destined to affect the disclosure practices in the insurers’ financial statements. The paper aims to verify whether the application of IFRS 4 to the financial statements of Italian insurers guarantees a complete disclosure about assets and liabilities related to the contracts containing a discretionary participation feature (DPF). In order to answer the research question, the following literature is considered: i) the one that has been exploring — and for a long time so — the specific characters of the insurers’ financial statements compliant with the Italian regulation; ii) the one that intercepts this topic verifying techniques and impacts of IFRSs adoption; iii) the one that measures the entities’ disclosure and seeks for its determinants. The research starts from an empirical analysis based on 2004 and 2005 financial reports of the Italian insurers and it is supported by documental analysis and interviews. The expected results — which will emerge by processing the collected data — are about a non complete disclosure of: a) the assets and liabilities related to DPF contracts; b) the reasons why “shadow accounting” arises and how it is measured; c) asymmetric changes in assets and liabilities related to DPF contracts that can affect equity and net earnings. In Italy, this topic came up for the first time in April 2006, when the 2005 financial statements were approved by shareholders, and since then it has been representing a new interesting field for empirical analysis. This study aims to contribute to the international debate on the application of IFRS by insurance companies, giving empirical evidence of the impact of these financial reporting standards on disclosure related to DPF contracts.
2007
9788814135804
DPF contracts; disclosure; shadow accounting; insurers' financial statement
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11562/308406
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