The Insurance Commission has started the countdown for insurance companies to transition to a new set of accounting policies that will make their financial reports more transparent and universally comparable, especially for the investing public.
In a webinar on the new accounting system conducted recently, IC Deputy Commissioner Ferdinand George Florendo said insurance companies may start the shift to Philippine Financial Reporting Standard (PFRS) 17—from the current PFRS 4—starting January 2023 in time for the industry-wide application in 2025.
He said firms were given enough time to complete the transition as these need to change their data administration, financial presentations and actuarial calculations.
The main difference between the currently used PFRS 4 and the succeeding PFRS 17 is that PFRS 4 is an intermediary standard which allows insurers to apply existing local generally accepted accounting principles resulting in diverse practices for reporting insurance contracts. The new set of rules uses a single accounting approach.
