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Making Sense of the IFRS 17 Transition Effects

Merjona Lamaj et al.

Accounting Horizons2026https://doi.org/10.2308/horizons-2025-088article
AJG 3ABDC A
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0.50

Abstract

SYNOPSIS This study examines the financial statement effects of the transition from the diverse insurance accounting practices under IFRS 4 to the unified framework of IFRS 17, alongside the concurrent adoption of IFRS 9. Analyzing 42 European insurers, we document substantial variation in transition approaches with implications for future reported profitability. IFRS 17 led to a significant average decrease in equity, primarily driven by the current measurement of insurance liabilities and the alignment of revenue recognition with service delivery, whereas IFRS 9 had a limited impact. Importantly, we document reduced accounting mismatches as restated IFRS 17/IFRS 9 equity declined less during the 2022 interest-rate spike than stated IFRS 4/IAS 39 figures, with liability remeasurement gains offsetting losses on financial assets. These findings highlight the role of IFRS 17 and its alignment with IFRS 9 in better capturing insurers’ underlying economics and provide timely insights for standard-setters and regulators. Data Availability: All data are available from the identified public annual reports. JEL Classifications: G22; G38; M41; M48.

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https://doi.org/https://doi.org/10.2308/horizons-2025-088

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@article{merjona2026,
  title        = {{Making Sense of the IFRS 17 Transition Effects}},
  author       = {Merjona Lamaj et al.},
  journal      = {Accounting Horizons},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.2308/horizons-2025-088},
}

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Making Sense of the IFRS 17 Transition Effects

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