The Committee on Property and Casualty Insurance Financial Reporting (PCFRC) has prepared this educational note to provide guidance related to setting and applying discount rates (including cash flow considerations) for the purposes of calculating the present value of estimates of future cash flows under IFRS 17.
This educational note is structured in sections as follows:
• Sections 1 and 2, respectively, provide an introduction and a list of the terminology used in this educational note.
• Sections 3 through 7 illustrate various considerations in determining an entity’s fulfilment cash flows, including selecting an IFRS 17 discount curve.
• Sections 8 through 13 provide additional guidance around the application of discount rates, measuring changes in discounting assumptions, and other aspects of financial statement presentation.
• Section 14 describes the illustrative examples set out in Appendices 1 through 9, detailed in the Excel file that forms part of this educational note.