BA Sample Exam #16 VS CAS IFRS Sample #4

Hiver19Hiver19
in CIA.IFRS17-2

Hi,

For BA Sample Exaam #16 we use time t=1,2,3,4,5... to discount the cost of capital, while in CAS IFRS Sample #4, they use t=0.5, 1.5, 2.5... to discount the cost of capital.
I also noticed in source appendix <6C_CIA_Educational_Note_IFRS_17_Risk_Adjustment_for_NonFinancial_Risk>, they use t=1,2,3,4,5,... to discount too.

I was confused about the method, in what circumstances should we use t=0.5,1.5,2.5?

Thank you for answering!

Comments

  • Staff-T1Staff-T1
    It doesn't matter. You can discount at year end or mid year if the question doesn't say specifically. However, if it's stated in the question that capital is released in the middle of the year or end of the year, then you'd have to discount accordingly. Otherwise, just state your assumptions and you'll be fine either way
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