Listed companies in the European Union are obliged to produce official, comparable financial statements each year that set out their financial positions.
These statements are produced in accordance with a set of international financial reporting standards (IFRS). These standards are drafted by the International Accounting Standards Board (IASB). The European Financial Reporting Advisory Group (EFRAG) is responsible for endorsing IFRS standards for the European Union, alongside the European Commission’s Accounting Regulatory Committee (ARC). AMICE has observer status on EFRAG’s Insurance Accounting Working Group.
Mutuals and cooperative entities are not listed companies and so should not automatically be subject to IFRS. Nevertheless, some mutuals opt to apply IFRS voluntarily while certain EU countries have extended the rules to unlisted undertakings such as mutual/cooperatives.
AMICE seeks to ensure that all policy developments affecting financial reporting take sufficient and due account of the mutual and cooperative model in terms of structure, capital-raising and investment. Mutuals/cooperatives do not have shareholders; IFRS is structured for the needs of institutional investors. It is critical that any requirements under IFRS do not make their application unnecessarily burdensome, and reflect the characteristics of the mutual model in those circumstances that a mutual applies the standards.
AMICE comments to IASB exposure draft on insurance contracts