IFRS 17 CAS Sample Question #7

sofiagiubilasofiagiubila
in PRACTICE EXAM

I noticed that in the answer key on the CAS website for the IFRS17 sample question #7, in order to find the insurance revenue financing component, they simply take the (prior period insurance revenue financing component - insurance finance expense)*(% service provided)

Where the % of service provided is cumulative. Whereas in the Battle Acts sample response you're taking the (sum of insurance finance expense for all prior periods - insurance revenue financing component for all prior periods)*(% of remaining service provided)

I find the answer key in Battle Acts a little more complex, especially with having to calculate the % of remaining service provided instead of the cumulative service provided. Is there a reason for the differing solutions? Would one work better than the other on the exam?

Comments

  • sarahhuang33sarahhuang33

    and I noticed that the formula for calculating insurance revenue financing component (col5) in the table is different from the formula in the footnote. In the footnote, you use (sum of col4 - sum of col5); while in the table, you use (sum of col4 + sum of col5). I wonder which one is correct?

  • Staff-T1Staff-T1
    The BattleActs solution is the most correct version. I do not think the CAS method reconciles with what is in the CIA paper, in the sense that their LRC is not equal to 0 when all coverage has been provided which should not be the case. If you change the decimal places to 2+, you will see that it's not zero in the CAS sample solutions
Sign In or Register to comment.