The Main Context And Effectiveness Analysis Of IFRS 17 Insurance Contracts

Today,the risks and uncertainties have become a normal state of economic operation.How to effectively prevent,circumvent,transfer,and control various risks has become an important part of the operation and management of various companies(countries).It is in this context that the insurance industry,which operates and manages risks,can in many ways promote economic activity: it can promote financial stability,strengthen social security networks,expand the scope of economic activity,and help strengthen effective Risk management)has developed rapidly in recent years.The degree of international management of insurance companies is also constantly improving.China's major insurance giants(China Life,PICC,Ping An,and Pacific Insurance)have successively listed at home and abroad(listed financing).The more the economy develops,the more important accounting is;the more insurance develops,the more important insurance accounting is.Before the convergence of domestic accounting standards and international accounting standards,companies listed at the same time at home and abroad must prepare financial statements and disclose information in accordance with domestic and international accounting standards.This greatly increases the operating costs of listed companies.Especially for insurance companies,because of the differences between the international insurance accounting standards and the domestic insurance accounting standards,there are huge differences in the net assets and net profits reported under the two sets of accounting standards,which makes many investors very It is difficult to understand that the financial statements of insurance companies are vividly called "black boxes",which makes it difficult for our insurance industry to absorb more funds.Therefore,the establishment of a set of internationally accepted insurance accounting standards has become an urgent requirement for people from all walks of life(including insurance company management,investment analysts,actuaries,accountants,lawyers,etc.).It is against this background that the International Accounting Standards Board and the American Accounting Standards Board are actively studying accounting standards for insurance contract projects.China is also actively involved in this project and fully draws on and absorbs its outstanding achievements to formulate domestic insurance accounting standards.In May 2017,the International Accounting Standards Board(hereinafter referred to as "IASB" or "International Standards Board")officially issued "International Accounting Standards No.17-Insurance Contracts"(IFRS 17),which will replace the previous "International Accounting Standards" No.4-Insurance Contract(IFRS 4),effective January 1,2021.IFRS17 is the first truly international accounting standard for insurance contracts.The release of this standard will have a major impact on the insurance industry globally.It will help investors and other parties better understand the risk profile of insurance companies.Mouth,profitability and financial status will help provide financial stability by increasing transparency.This paper mainly focuses on the process of IFRS17 development,the main content of IFRS17 includingthe important changes of IFRS17 and IFRS4,and the potential effect of IFRS17 compared with current China's insurance accounting practices,and further discusses what the Chinese insurance industry can do to address these important changes.