Question ID: 1387
Regulation Reference: (EU) No 2009/138 - Solvency II Directive (Insurance and Reinsurance)
Topic: Other
Article: 75
Status: Final
Date of submission: 01 Jul 2017
Question
IFRS 16 Leases are due to be effective from 1 January 2019. The new Standard requires leases to recognise nearly all leases on the balance sheet which will reflect their right to use an asset for a period of time and the associated liability for payments.
(i) Can we please check if there will be any changes/updates to the Solvency II guidance to reflect the new IFRS 16 requirements or will Solvency II remains to be consistent with current IAS 17 requirements; particularly on the off-balance sheet recognition of operating lease in the lessees' accounts?
EIOPA answer
See response to QA1336. At this point in time, we do not believe that any additional guidance in relation to IFRS 16 Leases is necessary. The recognition and valuation of balance sheet items according to IFRS 16 Leases fall under the requirements of Art. 16(4) of the Delegated Regulation (EU) 2015/55 and therewith can be assumed to be consistent with Art. 75 of the SII Directive.A market-consistent valuation in accordance with Art. 75 needs to be ensured.