Front-ending of profits

OnePassOnePass
in CIA.IFRS17

Hi :)

I was wondering if you could confirm my understanding to front-ending profit: release the profit to income immediately after the contract's written. So no front-ending profit would mean the profit or loss from the contact has to be released based on an earning schedule.

Thank you~

Comments

  • Staff-T1Staff-T1

    Yes that is a correct interpretation. Although in the context of IFRS17, loss from a contract is recognized immediately in the P&L

  • OnePassOnePass

    Good call thank you! I was wondering what if the loss turned back to be a profit later? do we write off the loss immediately?

  • Staff-T1Staff-T1

    You'd completely reverse the losses which flows into P&L, and then amortize the portion that relates to the new profit. For example if you are carrying a loss component of -40, and in this quarter the group of contracts turn profitable; you'd reverse that loss component and recognize a CSM which will then be released as service is provided

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