GROUP ACCOUNTING POLICIES (continued) 2. Changes in accounting policies and disclosures (continued) 2.1 New and amended standards and interpretations (continued) • recognises and measures groups of insurance contracts at: o a risk-adjusted present value of the future cash flows (the fulfilment cash flows) that incorporates all available information about the fulfilment cash flows in a way that is consistent with observable market information, plus o an amount representing the unearned profit in the group of contracts (the contractual service margin or CSM), where applicable; and o recognises surplus from a group of insurance contracts over each period that the Group provides insurance contract services, as the Group is released from risk, where applicable. The Group’s classification and measurement of insurance and reinsurance contracts is explained in Note 9.1. 2.1.1.2 Changes in presentation and disclosure For presentation in the Statement of Financial Position, the Group aggregates portfolios of insurance and reinsurance contracts held and presents separately: • Portfolios of reinsurance contracts held that are assets; • Portfolios of reinsurance contracts held that are liabilities; and • Portfolios of insurance contracts that are liabilities. The portfolios referred to above are those established at initial recognition in accordance with the IFRS 17 requirements. The line-item descriptions in the Statement of Profit or Loss and Other Comprehensive Income have been changed significantly compared to the previous reporting period. Previously the Group reported the following line items: • Net insurance premium revenue; • Net insurance benefits and claims; and • Movement from/(to) Insurance policyholder liabilities. Instead, IFRS 17 requires separate presentation of: • Insurance revenue; • Insurance service expenses; • Insurance finance income or expenses; and • Income or expenses from reinsurance contracts held. The Group provides disaggregated qualitative and quantitative information in the notes to the financial statements detailing: • Amounts recognised in its financial statements from insurance contracts; and • Significant judgements, and changes in those judgements, when applying the standard. 2.1.1.3 Transition On transition date, 1 January 2022, the Group: • identified, recognised and measured each group of insurance contracts as if IFRS 17 had always applied, unless impracticable; • identified, recognised and measured assets for insurance acquisition cash flows as if IFRS 17 had always applied. However, no recoverability assessment was performed before the transition date; • derecognised any existing balances that would not exist had IFRS 17 always applied; and • as part of its mutual operating model, recognised any resulting net difference as part of Long-term insurance liabilities. 107 Group Accounting Policies
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