Page 79 - Continental Reinsurance 2022 Annual Report

Statement of Significant Accounting Policies
periods commencing on or after 1 January 2022:
a Property, Plant and Equipment: Proceeds before
intended use Amendments to IAS 16, effective
January 1, 2022
The amendment to IAS 16 Property, Plant and
Equipment (PP&E) prohibits an entity from deducting
from the cost of an item of PP&E any proceeds received
from selling items produced while the entity is preparing
the asset for its intended use. It also clarifies that an
entity is testing whether the asset functioning properly
when it assesses technical and physical performance of
the asset.
The amendments had no impact on the group and
company during the period.
b Reference to the Conceptual Framework
Amendments to IFRS 3, effective January 1, 2022
Minor amendments were made to IFRS 3 Business
Combinations to update the references to the
Conceptual Framework for Financial Reporting and to
add an exception for the recognition of liabilities and
contingent liabilities within the scope of IAS 37
Provisions, Contingent Liabilities and Contingent Assets
and Interpretations. The amendments also confirm that
contingent assets should not be recognised at the
acquisition date.
The amendments had no impact on the group and
company during the period.
2.6 Standards and interpretations issued/amended but
not yet effected/effective
Other standards issued/amended by the IASB but yet to
be effective are outlined below:
a Classification of Liabilities as Current or Non-current
Amendments to IAS 1 effective 1 January 2023
The narrow-scope amendments to IAS 1 Presentation of
Financial Statements clarify that liabilities are classified b) the carrying amount of its liabilities arising from
as either current or non- current, depending on the
rights that exist at the end of the reporting period.
Classification is unaffected by the expectations or
events after the reporting date (e.g. the receipt of a
waver or a breach of covenant). The amendments also
clarify what IAS 1 means when it refers to the
"settlement" of a liability. The amendments could affect
the classification of liabilities, particularly for entities c) as at 31 December 2015, which is the reporting date
that previously considered management's intention
determine classification and for some liabilities that can
be converted into equity. They must be applied
retrospectively in accordance with the normal
requirements in IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors.
The impact of this amendment on the Group's financial
statements is currently under assessment.
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b IFRS 9 - Financial instruments effective 1 January
2018
IFRS 9 is part of the IASB’s project to replace IAS 39. It
addresses classification, measurement and impairment
of financial assets as well as hedge accounting.
IFRS 9 replaces the multiple classification and
measurement models in IAS 39 with a single model that
has only three classification categories: amortised cost,
fair value through OCI and fair value through profit or
loss. It includes the guidance on accounting for and
presentation of financial liabilities and derecognition of
financial instruments which was previously in IAS 39.
Furthermore for non-derivative financial liabilities
designated at fair value through profit or loss, it requires
that the credit risk component of fair value gains and
losses be separated and included in OCI rather than in
the income statement.
IFRS 9 also requires that credit losses expected at the
balance sheet date (rather than only losses incurred in
the year) on loans, debt securities and loan
commitments not held at fair value through profit or
loss be reflected in impairment allowances.
Furthermore, the IASB has amended IFRS 9 to align
hedge accounting more closely with an entity’s risk
management. The revised standard establishes a more
principles-based approach to hedge accounting and
addresses inconsistencies and weaknesses in the current
model in IAS 39.
The company elected to apply the temporary
exemption from IFRS 9 and qualifies for the temporary
exemption based on the following;
a) its activities are predominantly connected with
insurance contracts;
insurance contracts and insurance connected liabilities
for the group sum up to N93.8billion as at 31 Dec 2022
(31 Dec 2021 : N60.5billion), Company N39.2billion
(31 Dec 2021: 27.7billion) which is greater than 80 per
cent of the total carrying amount of all its liabilities as at
31 Dec 2022 and 31 Dec 2022 respectively;
that immediately precedes 1 January 2016, the carrying
amount of the group and company liabilities arising
from insurance connected contracts was 92% which is
greater than 90 per cent of the total carrying amount of
all its liabilities as at that date as presented below;