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Insights into recognition, measurement and reporting of insurance contracts in India
Ind AS 117, Insurance Contracts, introduces a comprehensive principles-based framework for the recognition, measurement, presentation and disclosure of insurance contracts, establishing a globally consistent approach to accounting for insurance liabilities.
In India, the standard has been applicable to all entities other than insurance companies since 1 April 2024. For insurance companies, the Insurance Regulatory and Development Authority of India (IRDAI) has mandated implementation with effect from 1 April 2026. In addition, insurers may avail a one-year forbearance from the application of Ind AS, subject to receiving approval from the IRDAI.
The standard requires insurance contracts to be measured using current estimates of future cash flows, an explicit risk adjustment and a contractual service margin. This represents a fundamental change in the timing and pattern of profit recognition. While enhancing transparency and comparability in financial reporting, Ind AS 117 also necessitates significant changes to data, systems, processes and governance frameworks across reporting entities.
Against this backdrop, Grant Thornton Bharat is pleased to present its ‘Insights into Ind AS 117’ series. The series is being launched with the following three articles (Objective and scope, Initial recognition and measurement of insurance liabilities, and Subsequent measurement of insurance liabilities), which examine key aspects of the standard and its implementation requirements.
The latest edition of the Quarterly GAAP Bulletin summarises significant accounting, auditing, and regulatory updates, compiled to meet the needs of dynamic Indian businesses and focuses on key developments in India and across the globe.
Most accounting standards change processes. Some change disclosures. A few quietly change the conversation. I believe Ind AS 118 belongs in the third category.
The 2026 edition of the Ind AS compliant Example Consolidated Financial Statements aims to promote high‑quality and consistent implementation of applicable financial reporting framework requirements in India. These financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) specified under Section 133, read with Division II of Schedule III of the Companies Act, 2013.