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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Korea’s Financial Supervisory Service (FSS) announced that life insurers will no longer be allowed to use the “non-standard accounting” method previously applied to participating (with-profit) insurance contracts following the implementation of IFRS 17. The change will take effect starting with this year’s year-end financial statements.
Under the new guidance, insurers must separately present participating insurance contracts in their financial statements and provide detailed disclosures explaining the effects of interest rate volatility and regulatory requirements.
The FSS clarified that although the practice will be discontinued, its past use does not constitute a violation of accounting standards and will not trigger audits or regulatory sanctions. The change is considered a prospective accounting policy adjustment, not a correction of past errors.
Regulators noted growing concerns that continued use of the exception could create unnecessary confusion and undermine Korea’s status as a full IFRS adopter. The updated guidance aims to enhance transparency and improve the usefulness of financial statements for stakeholders.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
