Approved by the regulation of the European Commission:

XLS

Name of standard/
interpretation		 Effective date Approving regulation Comments
IFRS 17 Insurance Contracts 1 January 2023 2021/2036 The purpose of the standard is to establish the uniform accounting policy for all types of insurance contracts, including the reinsurance contracts held by the insurer. Introduction of consistent measurement rules should ensure comparability of financial reports between different entities, states and capital markets.
The new standard defines insurance contract as a contract under which one entity accepts significant insurance risk from the policyholder by agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder. This definition is consistent in principle with the definition in IFRS 4. The scope of the standard does not cover, among others, investment contracts, product warranties, loan guarantees, catastrophe bonds and weather derivatives (contracts requiring payment based on the climatic, geological factor or another physical variable that is not specific to the party to the contract).
The following items will have the biggest impact on the occurrence of differences from the current standard:
  • measurement of liabilities and assets under insurance contracts which will:
    • be based on the value of the best estimate of future cash flows;
    • take into account the time value of money;
    • include a non-financial risk adjustment;
  • recognition of expected profits for a group of insurance contracts over time, in proportion to the so-called units of service provided, corresponding to the level of provision by the insurance company in each reporting period;
  • recognition of the entire expected loss on insurance contracts at the time the entity assesses that the concluded contract gives rise to a burden, which may be at the date of initial recognition of the contract or at subsequent measurement;
  • separate (from direct business contracts) measurement of liabilities and assets for outward reinsurance.

The new standard introduces new measurement, presentation and disclosure rules for insurance contracts that will affect the shape of PZU Group’s financial statements.
The new standard requires separate presentation of outward reinsurance contracts, and insurance and inward reinsurance contracts. Within each of these two groups, separate presentation is required on the asset and liability sides of the portfolios, depending on whether the sum of the balance sheet items making up the portfolio valuation is a net asset or liability. In addition, only the aggregate item of assets and liabilities under insurance contracts will be presented on the balance sheet, without distinguishing items such as premium receivables and liabilities, DAC or technical provisions. In the income statement, the result from insurance will be shown broken down into income from insurance contracts and expense from insurance contracts, as well as the result from outward reinsurance contracts. Elements such as written premium will not be presented.
The standard also requires quantitative and qualitative disclosures, with particular emphasis on the expert assessments used and the entity’s risk profile. More detailed information on the implementation of IFRS 17 in the PZU Group is presented in section 6.3.
Amendments to IAS 1 – Presentation of Financial Statements 1 January 2023 2022/357 In accordance with the amendments, the entity will be obligated to disclose material accounting policy information rather than significant accounting principles (as previously). The amendment contains examples of identification of material accounting policies and stipulates that an accounting policy may be material due to its nature, even if the figures are immaterial. An accounting policy is material if the users of the financial statements need it to understand other material information in such statements. Disclosure of immaterial accounting policies may not obscure material accounting policies.

The amendment will not affect the PZU Group’s consolidated statements to any significant extent.
Amendments to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors 1 January 2023 2022/357 The amendments to IAS 8 comprise:
  • replacement of the definition of a change in estimates with a definition of estimates. In accordance with the new definition, estimates are „monetary amounts in financial statements that are subject to measurement uncertainty”;
  • explanation that a change in the estimate resulting from new information or new events is not a correction of error. In addition, the effects of a change in input data or measurement technique applied to determine the estimate are changes in estimates, unless they follow from a correction of errors of previous periods;
  • clarification that a change in an accounting estimate may affect only the current period’s profit or loss, or the profit or loss of both the current period and future periods. The effect of the change relating to the current period is recognized as income or expense in the current period. The effect, if any, on future periods is recognized as income or expense in those future periods.

The amendment will not affect the PZU Group’s consolidated statements to any significant extent.
Amendment to IAS 12 – Income Taxes 1 January 2023 2022/1392 According to the amendment, the exemption specified in IAS 12.15(b) for the initial recognition of a deferred tax asset or liability will not apply to transactions in which both taxable and deductible temporary differences arise, resulting in the need to recognize a deferred tax asset and liability at the same time (e.g. in the case of lease transactions). The amendment applies to the transactions occurring on or after the commencement date of the earliest comparative period presented in the financial statements.

The amendment will not affect the PZU Group’s consolidated statements to any significant extent.

Not approved by the European Commission:

XLS

Name of standard/
interpretation		 Date of issue by IASB Effective date (according to IASB) Comments
Amendment to IAS 1 – classifying liabilities as current and noncurrent 23 January 2020 1 January 2023 The amendments specify that the conditions which exist at the end of the reporting period are those which will be used to determine if a right to defer settlement of a liability exists and also that the intentions or expectations of an entity regarding the willingness to use the possibility of deferring a liability are not relevant for the classification.

The amendments will not exert a material influence on the PZU Group’s consolidated financial statements.
Amendment to IFRS 16 – Leases 22 September 2022 1 January 2024 The amendment requires that when measuring lease liabilities arising from a leaseback, the seller (lessee) should not recognize any gain or loss related to the retained right of use.

The amendment will not affect the PZU Group’s consolidated financial statements to any significant extent.

In summary, in the opinion of the PZU Group, the introduction of the above standards and interpretations (except for IFRS 17) will have no material effect on the accounting policies applied by the PZU Group.

Previous topic
6.2.1. Standards, interpretations and amended standards effective from 1 January 2022
Next topic
6.3 Implementation of IFRS 17 in PZU Group