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BASICS OF COST ACCOUNTING

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BASICS OF COST ACCOUNTING

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As noted above, IFRS 4 does not require separation if the component itself meets the definition of an insurance contract. In considering whether this exemption applies, insurance risk is assessed in relation to the component. It may happen that the contract as a whole does not fall within the scope of IFRS 4 because it does not contain significant insurance risk, but that the component itself contains significant insurance risk and, had it been a separate contract, would have fallen within the definition of an insurance contract. IFRS 4 does not provide any further limitations – any significant insurance risk disqualifies a component from recognition as a derivative...

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