October 3rd/2023.
On August 29, 2023, the URF published a draft of decree that aims to adapt the regulatory order related to insurance for the application of the accounting standard IFRS 17 “insurance contracts” accounting standard, which establishes the principles for recognition, measurement, presentation and disclosure in insurance contracts. This decree seeks to replace the accounting standard IFRS 4, incorporated by Decree 2784 of 2012, in order to sophisticate accounting practices in favor of usefulness and congruence between jurisdictions.
Scope and Coverage
The regulations contained in this draft decree apply to insurance companies and other financial information preparers classified under Group 1. These regulations are specifically designed for insurance contracts, including reinsurance contracts entered into by the reporting entity, reinsurance contracts of which it is the holder, and investment contracts with discretionary participation features subscribed to by the entity, provided that the entity enters into insurance contracts.
Disclosures
Entities must disclose this information in the notes to the balance sheet and in the cash flow statement so that the users have sufficient information to evaluate the effect that insurance contracts have on each report.
Transition regime
The Decree will be in force from the date of its publication, but Technical Annex 01 of 2023, which contains the addition of IFRS 17’s regulations, will apply to general purpose financial statements from January 1, 2026. The same will occur with respect to the financial information preparers supervised by the Financial Superintendency of Colombia with respect to their individual and separate financial statements.