LRC using GMA

daviddavid
in CIA.IFRS17-LRC

At initial recognition, using GMA:
if the group is non-onerous, then LRC always = 0 = FCF + CSM.
if group is onerous, then LRC = Fulfilment cash flows = LC

can you point out whether my above understanding is correct? I'm a bit confused especially on the onerous part, because in page 22 of the LRC reading, it says LRC = LRC excl. LC + LC. But shouldn't the LC just be FCF if onerous (I don't understand what is LRC excl. LC)?

Comments

  • Staff-T1Staff-T1
    Your understanding of the GMA is correct.

    The LRC ex LC is the PAA estimate of the LRC (UEP-DAC)

    The LC when your measuring using the PAA method is not the same as when you're measuring using the GMA method
  • daviddavid

    Thank you, that clarifies things a lot.

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