Whether the undertaking for leased assets (used for own purposes) can use valuation method consistent with annex to IFRS 16 regulation described in paragraphs 34 and 35? (COMMISSION REGULATION (EU) 2017/1986)

Does EIOPA expect that value of leased asset will by equal to liabilities connected to leasing contract (no impact for own funds)?

Background of the question

IFRS 16 apply a cost model, a lessee shall measure the right-of-use asset at cost: less any accumulated depreciation and any accumulated impairment losses; and adjusted for any remeasurement of the lease liability.

EIOPA answer

In accordance with Article 9(2) of Commission Delegated Regulation (EU) 2015/35, the valuation of assets follows IFRSs by default, if their valuation requirements are consistent with the valuation approach set out in Article 75 of Directive 2009/138/EC. Where those IFRSs allow for the use of more than one valuation method, insurance and reinsurance undertakings shall only use valuation methods that are consistent with Article 75 of Directive 2009/138/EC. Therefore, the application of the option to use an amortised cost approach is not appropriate.