Part 2Scope

Chapter 2 Scope

2.1 This Standard shall be applied by all entities to all types of financial instruments except:
(e) rights and obligations arising under an insurance contract as defined in a contract within the scope of AASB 17 Insurance Contracts, other than an issuer’s rights and obligations arising under an insurance contract that meets the definition of a financial guarantee contract or an investment contract with discretionary participation features within the scope of AASB 17. However, this Standard applies to:
(i) derivatives a derivative that are is embedded in contracts a contract within the scope of AASB 17, if the derivatives are not themselves contracts derivative is not itself a contract within the scope of AASB 17.; and
(ii) investment components an investment component that are is separated from contracts a contract within the scope of AASB 17, if AASB 17 requires such separation, unless the separated investment component is an investment contract with discretionary participation features within the scope of AASB 17.
(iii) an issuer’s rights and obligations under insurance contracts that meet the definition of a financial guarantee contract. However Moreover, if an issuer of financial guarantee contracts has previously asserted explicitly that it regards such contracts as insurance contracts and has used accounting that is applicable to insurance contracts, the issuer may elect to apply either this Standard or AASB 17 to such financial guarantee contracts (see paragraphs B2.5–B2.6). The issuer may make that election contract by contract, but the election for each contract is irrevocable.
(iv) an entity’s rights and obligations that are financial instruments arising under credit card contracts, or similar contracts that provide credit or payment arrangements, that an entity issues that meet the definition of an insurance contract but which paragraph 7(h) of AASB 17 excludes from the scope of AASB 17. However, if, and only if, the insurance coverage is a contractual term of such a financial instrument, the entity shall separate that component and apply AASB 17 to it (see paragraph 7(h) of AASB 17).
(v) an entity’s rights and obligations that are financial instruments arising under insurance contracts that an entity issues that limit the compensation for insured events to the amount otherwise required to settle the policyholder’s obligation created by the contract, if the entity elects, in accordance with paragraph 8A of AASB 17, to apply AASB 9 instead of AASB 17 to such contracts.
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