[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-seo-391661-105":3,"detail-sidebar-cat-0-en-105":81,"doc-detail-391661-en":131},{"code":4,"msg":5,"data":6},0,"ok",{"site_id":7,"language":8,"slug":9,"title":10,"keywords":11,"description":12,"schema_data":13,"social_meta":74,"head_meta":76,"extra_data":78,"updated_unix":80},105,"en","10-questions-regarding-ifrs-17-measurement-models-in-ifrs-17","10 Questions regarding IFRS 17 - Measurement models in IFRS 17","","A structured Q&A explains how IFRS 17 determines the accounting measurement models for insurance contracts based on their content. It introduces three measurement models: the General Measurement Model, the Premium Allocation Approach, and the Variable Fee Approach. It then details the General Measurement Model, including how profit is recognized through technical provisions via Contractual Service Margin, and how components such as Liability for Remaining Coverage and Liability for Incurred Claims are valued and updated. Key mechanisms like risk adjustment, discounting, roll-forward, and loss recognition when CSM turns negative are covered.",{"@graph":14,"@context":73},[15,34,56],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/document/","Document",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/document/exam/","Exam",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/document/10-questions-regarding-ifrs-17-measurement-models-in-ifrs-17/391661/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/10-questions-regarding-ifrs-17-measurement-models-in-ifrs-17/391661.png","ImageObject",300,407,{"name":42,"@type":43},"Alex Sinclair","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-11-10","2026-09-25",true,{"@type":52,"interactionType":53,"userInteractionCount":55},"InteractionCounter",{"@type":54},"ViewAction",11,{"@type":57,"mainEntity":58},"FAQPage",[59,65,69],{"name":60,"@type":61,"acceptedAnswer":62},"Which three measurement models does IFRS 17 define for insurance contracts?","Question",{"text":63,"@type":64},"IFRS 17 defines three measurement models: the General Measurement Model, the Premium Allocation Approach, and the Variable Fee Approach.","Answer",{"name":66,"@type":61,"acceptedAnswer":67},"What are the main components of technical provisions under the General Measurement Model?",{"text":68,"@type":64},"Technical provisions consist of Liability for Remaining Coverage (LRC) and Liability for Incurred Claims (LIC).",{"name":70,"@type":61,"acceptedAnswer":71},"When must the Contractual Service Margin (CSM) be recognized as an expense in the income statement?",{"text":72,"@type":64},"When the CSM becomes negative, the negative portion must be recognized as an expense in the income statement to immediately recognize loss from further settlement of the contract.","https://schema.org",{"og:url":32,"og:type":75,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":77,"canonical":32},"index,follow",{"doc_id":79,"site_id":7},391661,1791325384,{"code":4,"msg":82,"data":83},"success",[84,88,92,95,100,105,110,115,120,123,127],{"id":22,"doc_module":4,"doc_module_name":25,"category_name":85,"show_sort_weight":86,"slug":87},"Story & Novel",90,"story-novel",{"id":26,"doc_module":4,"doc_module_name":25,"category_name":89,"show_sort_weight":90,"slug":91},"Literature",80,"literature",{"id":33,"doc_module":4,"doc_module_name":25,"category_name":29,"show_sort_weight":93,"slug":94},70,"exam",{"id":96,"doc_module":4,"doc_module_name":25,"category_name":97,"show_sort_weight":98,"slug":99},5,"Comic",60,"comic",{"id":101,"doc_module":4,"doc_module_name":25,"category_name":102,"show_sort_weight":103,"slug":104},6,"Technology",50,"technology",{"id":106,"doc_module":4,"doc_module_name":25,"category_name":107,"show_sort_weight":108,"slug":109},7,"Healthcare",40,"healthcare",{"id":111,"doc_module":4,"doc_module_name":25,"category_name":112,"show_sort_weight":113,"slug":114},8,"Research & Report",30,"research-report",{"id":116,"doc_module":4,"doc_module_name":25,"category_name":117,"show_sort_weight":118,"slug":119},9,"Religion & Spirituality",20,"religion-spirituality",{"id":118,"doc_module":4,"doc_module_name":25,"category_name":121,"show_sort_weight":118,"slug":122},"World Cup","world-cup",{"id":124,"doc_module":4,"doc_module_name":25,"category_name":125,"show_sort_weight":124,"slug":126},10,"Lifestyle","lifestyle",{"id":128,"doc_module":4,"doc_module_name":25,"category_name":129,"show_sort_weight":96,"slug":130},19,"General","general",{"code":4,"msg":82,"data":132},{"doc_id":79,"user_id":133,"nickname":42,"user_avatar":134,"doc_module":4,"category_id":33,"category_name":29,"doc_title":10,"doc_description":12,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":55,"is_deleted":4,"is_public":22,"is_downloadable":22,"audit_status":22,"page_count":140,"language":141,"language_code":8,"site_id":7,"html_lang":8,"table_of_contents":142,"faqs":143,"seo_title":144,"seo_description":12,"update_tm":145,"read_time":113,"preview_page_count":4},1099523882182,"https://ap-avatar.wpscdn.com/davatar_6f874abed73319feea01a86fa6f0fab8","10 Questions regarding IFRS 17  \nVienna Insurance Group and KPMG  \nQuestion 1: Which are the measurement models in IFRS 17?  \nUnlike the regulatory-driven conventional European accounting rules, there is no differentiation by balance sheet division (life, health, property/casualty) with regard to measurement models.  \nInstead, IFRS 17 defines three measurement models (see figure below) according to which insurance contracts are to be accounted for depending on their content.  \n1. General Measurement Model  \n2. Premium Allocation Approach  \n3. Variable Fee Approach.  \n1. General Measurement Model („GMM“)  \nIn the fundamental model of IFRS 17, the so-called General Measurement Model, the profit is recognized as part of the technical provisions when the contract is concluded in order to avoid immediate recognition in the income statement that would otherwise arise. This profit margin is referred to as the “Contractual Service Margin”(CSM) . The General Measurement Model is generally applicable to all types of contracts.  \nIn this model, the technical provisions consist of:  \n1. „Liability for Remaining Coverage“(LRC), which corresponds to the actuarial reserve known today in life and health insurance, and the  \n2. „Liability for Incurred Claims“(LIC), which corresponds to the claims reserve.  \nLiability for Remaining Coverage, in turn, consists of three components:  \na. „Present Value of Future Cash Flows“(PVFCF), which corresponds to the present value of all future cash flows from premiums, insurance benefits and costs attributable to the contract. These cash flows are always based on current, realistic assumptions and are discounted using the current yield curve. In principle, this value corresponds to the “best estimate” of technical provisions under Solvency II (underlying assumptions may differ in individual cases, such as cost or interest rate assumptions) . The PVFCF is recalculated at each reporting date using current assumptions and the current yield curve. Normally (for non-onerous contracts), at the beginning of the contract term, the present value of premiums for adequately calculated contracts is higher than the present value of insurance benefits and costs, which is why this part of the LRC has a negative value (thus corresponds to an asset) at the beginning of the contract.  \nb. „Risk Adjustment“(RA) is the risk premium for the fact that realistic assumptions may be too prudent. The RA represents, again as in Solvency II, a separately presented amount of technical provisions. The RA is recalculated at each reporting date using a method to be chosen by the insurance company, but the method must be consistent in terms of a subsequent valuation.  \nc. „Contractual Service Margin“(CSM) is the profit originally priced into the contract, which is shown as a separate component of technical provisions. There is no equivalent in Solvency II for this component of technical provisions. Furthermore, the CSM is only actuarially calculated at the beginning of the contract. In subsequent years, the new level of the CSM “stems” from the roll-forward of the CSM (as defined in the standard) . The main components of change that are recognized in the income statement are, on the one hand, the interest (which is reported as interest expense) and, on the other hand, the release to be made, which is reported in the income statement as revenue (“insurance revenue”) and will in future constitute by far the most significant component of an insurance company’s earnings. Another component of change in the CSM results from the interaction between the change in the Present Value of Future Cash Flows described under a. and the Contractual Service Margin. Actuarial assumptions change from year to year, which also results in fluctuations in the PFVCF over the term of the contract. To the extent that these fluctuations relate to future years, the change in the Present Value of Future Cash Flows is not recognized in the income statement, but is recla","cbCaiiO71uxqZ8Vl","https://ap.wps.com/l/cbCaiiO71uxqZ8Vl","pdf",477754,12,"English","# Question 1: Which are the measurement models in IFRS 17?\n## General Measurement Model (GMM)\n### Components of technical provisions: LRC and LIC\n### Liability for Remaining Coverage (LRC)\n#### Present Value of Future Cash Flows (PVFCF)\n#### Risk Adjustment (RA)\n#### Contractual Service Margin (CSM) and loss recognition","[{\"question\":\"Which three measurement models does IFRS 17 define for insurance contracts?\",\"answer\":\"IFRS 17 defines three measurement models: the General Measurement Model, the Premium Allocation Approach, and the Variable Fee Approach.\"},{\"question\":\"What are the main components of technical provisions under the General Measurement Model?\",\"answer\":\"Technical provisions consist of Liability for Remaining Coverage (LRC) and Liability for Incurred Claims (LIC).\"},{\"question\":\"When must the Contractual Service Margin (CSM) be recognized as an expense in the income statement?\",\"answer\":\"When the CSM becomes negative, the negative portion must be recognized as an expense in the income statement to immediately recognize loss from further settlement of the contract.\"}]","10 Questions regarding IFRS 17 - Measurement models in IFRS 17 | PDF",1790356897]