DPAC amortization

AndrewLAndrewL
in CIA.IFRS17-LRC

Hi @graham ,

DPAC is an asset. Suppose we amortize DPAC by $50, asset decrease by $50, expense increases by 50 (Therefore equity/Net Income decreases by $50). Also according to the formula below, the LRC increases by $50.

Fundamental accounting equation says, Asset=Liability + Equity. Above we have right hand side decrease by $50 but left handside did not change. Am I missing something here?

Thanks

Comments

  • Staff-T1Staff-T1

    Under IFRS17, the concept of a DPAC doesn't exist and amortization of deferred acquisition costs are considered implicitly in the LRC through the CSM for the GMM and directly for the PAA. Your liability and equity will change in offsetting amounts while there will assets remains unchanged

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