Page 183 - IC46 addendum

Indian Accounting Standards

the return on specified the contract (paragraph

assets. AG30(h) of Ind AS 39).

Fair value measurement

is required.

2.17 Persistency bonus paid The embedded An option or automatic

at maturity in cash derivative (option to provision to extend the
(or as a period-certain receive the persistency remaining term to maturity
bonus) is not an of a debt instrument is not
annuity).
insurance contract closely related to the host

(unless the persistency debt instrument unless

bonus is life-contingent there is a concurrent

to a significant extent). adjustment to the

Insurance risk does not approximate current

include lapse or market rate of interest at

persistency risk the time of the extension

(paragraph B15 of this (paragraph AG30(c) of Ind

Standard). Fair value AS 39). If the option or

measurement is provision is not closely

required. related to the host

instrument, fair value

measurement is required.

2.18 Persistency bonus paid The embedded Not applicable. The entire

at maturity as an derivative is an contract is an insurance
life- insurance contract contract (unless the life-
enhanced
contingent annuity. (unless the life- contingent payments are
contingent payments are insignificant).

insignificant). Fair value

measurement is not

required (but not

prohibited).

2.19 Dual trigger contract, The embedded Not applicable. The entire

eg contract requiring a derivative is an contract is an insurance
payment that is insurance contract contract (unless the first
contingent on a (unless the first trigger trigger lacks commercial
breakdown in power lacks commercial substance).
supply that adversely substance).

affects the holder A contract that qualifies
(first trigger) and a as an insurance
specified level of contract, whether at
electricity prices inception or later,

remains an insurance

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