The transition from US GAAP to IFRS of insurance and reinsurance companies : case study: insurance and reinsurance Company X
Ho, Hung (2023)
2023
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2023121135996
https://urn.fi/URN:NBN:fi:amk-2023121135996
Tiivistelmä
Today, two accounting standards are implemented on a global scale: the United States General Accepted Accounting Principles (US GAAP) regulated by the Financial Accounting Standards Board (FASB) and the International Financial Reporting Standards (IFRS) governed by the IFRS Foundation. The former is used mainly in the US, while the latter is required to be used by more than 140 jurisdictions worldwide.
The research aimed to study the transition from US GAAP to IFRS of insurance and reinsurance companies. The thesis studied the phenomenon from three aspects: the motivation of the transfer, the problems encountered during the transition, and the solutions to overcome those problems.
Regarding the theoretical framework, the thesis explained the principles of (re)insurance and compares US GAAP and IFRS from a general viewpoint. Moreover, as the two most influential accounting standards of the transition are IFRS 17 – Insurance Contracts and IFRS 9 – Financial Instruments, these two standards and their comparable topics from US GAAP were explained and contrasted.
The empirical data was collected through semi-structured interviews with three experts working in the transition from US GAAP to IFRS of a case company. The case company is a global insurance and reinsurance company that has reported under US GAAP in the past but announced adopting IFRS within 5 years ago. The qualitative data was analyzed with the Thematic Analysis approach by coding data into comprehensive codes and grouping related codes into common themes. Those themes were analysed to derive conclusions about the phenomenon.
The study result finds that the motivation behind the transition of the case company is the benefits brought by the transition and the global usage of IFRS. Moreover, the research found five major problems and three major solutions to overcome those challenges. In summary, the case company has achieved many objectives so far and aims to finish the transition on its targeted date.
The research aimed to study the transition from US GAAP to IFRS of insurance and reinsurance companies. The thesis studied the phenomenon from three aspects: the motivation of the transfer, the problems encountered during the transition, and the solutions to overcome those problems.
Regarding the theoretical framework, the thesis explained the principles of (re)insurance and compares US GAAP and IFRS from a general viewpoint. Moreover, as the two most influential accounting standards of the transition are IFRS 17 – Insurance Contracts and IFRS 9 – Financial Instruments, these two standards and their comparable topics from US GAAP were explained and contrasted.
The empirical data was collected through semi-structured interviews with three experts working in the transition from US GAAP to IFRS of a case company. The case company is a global insurance and reinsurance company that has reported under US GAAP in the past but announced adopting IFRS within 5 years ago. The qualitative data was analyzed with the Thematic Analysis approach by coding data into comprehensive codes and grouping related codes into common themes. Those themes were analysed to derive conclusions about the phenomenon.
The study result finds that the motivation behind the transition of the case company is the benefits brought by the transition and the global usage of IFRS. Moreover, the research found five major problems and three major solutions to overcome those challenges. In summary, the case company has achieved many objectives so far and aims to finish the transition on its targeted date.