142 | Just Group PLC | Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
1. MATERIAL ACCOUNTING POLICIES continued 1.2. New accounting standards and new material accounting policies 1.2.1. Adoption of new and amended accounting standards The Group has adopted two new accounting standards, with effect from 1 January 2023:
• IFRS 17 “Insurance Contracts” was issued in May 2017 with an effective date of 1 January 2021. In June 2020, the IASB issued an amended standard which delayed the effective date to 1 January 2023. IFRS 17 was approved for adoption by the UK Endorsement Board in May 2022. IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4, “Insurance Contracts”. • IFRS 9 “Financial Instruments” replaces IAS 39 “Financial Instruments: Recognition and Measurement” and is effective for accounting periods beginning on or after 1 January 2018. However, the Group previously met the relevant criteria for, and applied, the temporary exemption from IFRS 9 for annual periods before 1 January 2023, the date at which IFRS 17 becomes effective. Consequently, the Group has applied IFRS 9 commencing 1 January 2023, with comparative periods restated. IFRS 9 is applicable to financial assets and financial liabilities and covers the classification, measurement, impairment and derecognition of financial assets and liabilities together with a new hedge accounting model. The comparative figures in the financial statements have been restated on the adoption of the standards. The impact on the opening statement of financial position for the earliest presented period (1 January 2022) is disclosed in note 1.2.2. Material accounting policy choices on the adoption of the new standards (IFRS 17 and IFRS 9) are included in note 1.5 and note 1.6 respectively. On the transition date, 1 January 2022, the Group has: • identified, recognised, and measured each group of gross insurance contracts and associated reinsurance contracts, as if IFRS 17 had always applied unless impracticable (refer to note 1.3). Where the Group has concluded that the fully retrospective approach is impracticable, it has applied the fair value approach (refer to note 1.4) on transition; • derecognised any existing IFRS 4 balances, including the Present Value of In-Force Business and other relevant balances that would not exist had IFRS 17 always applied; • presented reinsurance balances separately depending on whether they are in an asset or liability position at a portfolio level (previously at a treaty level), and reinsurance deposits previously classified as financial instruments are included within the value of reinsurance contracts; • recognised allowance for expected credit losses (ECL) on financial assets which are measured at amortised cost, on the adoption of IFRS 9; and • recognised any resulting net difference in retained earnings net of any related tax adjustments. The change in tax law enabling spreading of the tax recovery of the deferred tax asset created at implementation of IFRS 17 over a period of 10 years was enacted on 10 November 2022. The deferred tax asset at the transition date has been deemed fully recoverable based on projections of future business activity. The following amendments to existing standards have been adopted by the Group and do not have a significant impact on the financial statements: • IAS 1 “Presentation of financial statements” – Amendments in respect of disclosures of accounting policies. • IAS 8 “Accounting policies” – Amendments in respect of the definition of accounting estimates. • IAS 12 “Income taxes” – Amendments in respect of deferred tax related to assets and liabilities arising from a single transaction. • IAS 12 “Amendments in respect of International tax reform” – Pillar two model rules. The following amendments to existing standards in issue have not been adopted by the Group and are not expected to have a significant impact on the financial statements: • IAS 1 – Amendments in respect of the classification of liabilities as current or non-current (effective 1 January 2024).
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