Q22 vs Practice problem 2 in IFRS17-LRC excel problem.

kpark5kpark5
in CAS Sample IFRS 17 Questions

Practice problem 2 (in IFRS17-LRC excel problem) also has "expected premiums received at inception"
They calculated LRC as

Based on above & that you explained PAA LRC = Premium received - earned premium - DAC without considering Premium Receivable, I thought expected premium received at inception = UEP.

But Q22 solution shows that Expected Premium = premium receivable. Can you help me understanding the definition of Expected premiums received at inception?

Comments

  • christinechristine

    Same question here: I get the logic that LRC at initial recognition should be 0 like mentioned in the commentary. However, if I also refer to the IFRS-17 excel problems and formulas in the articles. Shouldn't LRC = Premium - Acquisition Cashflows = 2500 - 250 = 2250?

  • Staff-T1Staff-T1
    Expected premiums are analogous to premiums received in the practice 2 file.

    For Q22, you are right that 2250 would be the PAA LRC but the question is asking for the GMA LRC
  • kpark5kpark5

    Are you saying that
    Expected premium = premium received in practice problem 2.
    Expected premium = premium receivable in Q22.

    How can I know when to use what?

  • Staff-T1Staff-T1

    The difference in Q22 is that this is before initial recognition so there is no premiums received. You also never consider premiums receivable under PAA so that should trivialize things

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