Significant variability in FCF & PAA for ≤ 1 year contracts
Hello,
The following example from section 3 of the wiki seems at odds with the source text:
Example: Each contract in a group of contracts has a coverage period of ≤ 1 year, but significant variability in the fulfilment cash flows is expected. Is this group still PAA eligible.
no, because significant variability in fulfillment cash flows is expected
1st paragraph of section 3 in the source states:
Contracts with a coverage period of one year or less are automatically eligible for the PAA, according to IFRS 17.53(b)
and the 1st paragraph of section 5 reiterates:
Groups of contracts for which the coverage period of each contract is one year or less are eligible for the PAA based on IFRS 17.53(b) and accordingly no assessment of variability of the FCF is required
Am I missing a nuance between the wording of the example and the source?
Thanks!
Comments
No, I think you're right. I misread something in the source text. I have made a change to that example. Here's the direct link:
Thanks for letting me know.