IFRS 15 Implementation Project for Taiwan Insurance Company

Our Core Services and Contributions

Comprehensive Methodology Development

Based on the IFRS 15 Actuarial Practice Standard issued by the Actuarial Institute of Taiwan, and subject to review by the client’s external audit firm, we designed a customized internal accounting and actuarial methodology framework tailored to each client’s business model and regulatory requirements.

Prophet Actuarial Model Enhancement

We conducted an in-depth assessment of insurance products subject to IFRS 15—such as investment-type products with non-discretionary investment management services—and accurately translated their characteristics into the Prophet actuarial platform to ensure robust and reliable liability measurement.

Cross-Functional Data and Expense Allocation System Development

Working closely with clients’ Finance and Information Technology teams, we jointly designed and implemented new data architecture and expense allocation systems to ensure the reasonableness, accuracy, reconciliation, and governance of underlying data.

Knowledge Transfer and Technical Capability Building

We completed all key technical documentation and delivered customized training programs to enable clients’ internal teams to operate, maintain, and continuously enhance the IFRS 15 framework after project completion.

IFRS 15 Standard and Taiwan Regulatory Background

In September 2015, the International Accounting Standards Board (IASB) officially issued International Financial Reporting Standard 15, Revenue from Contracts with Customers (“IFRS 15”), which became effective on January 1, 2018.

However, due to limitations under Appendix III of Taiwan’s former accounting system template for life insurance companies, insurers were not previously able to fully adopt the requirements of IFRS 15.

To address this issue, the Life Insurance Association of the Republic of China proposed integrating Appendix III into Chapter 7, Section 3, Item 3 of the Accounting System Template for Life Insurance Companies, covering the accounting treatment of investment contracts. At the same time, the Association revised the presentation format by referencing the IFRS 15 Actuarial Practice Standard and removed the original Appendix III.

In 2023, the Insurance Bureau of the FSC announced amendments to Article 29 of the Regulations Governing Various Reserves for Insurance Enterprises, specifying that:

Where insurance products sold by life insurers contain distinct goods or services, service contract liabilities shall be measured by allocating transaction prices to performance obligations in accordance with IFRS 15, and corresponding service reserves shall be established.

Under the revised regulation, beginning January 1, 2026, Taiwan insurers are required to fully adopt IFRS 15 for accounting treatment of investment contracts.

Dual Compliance Framework for Service Contract Liability Measurement

Under the IFRS 15 framework, insurers measuring service contract liabilities (including service reserves) must comply with two fundamental standards, which form the foundation of our implementation approach:

IFRS 15 Requirements

Apply the core Five-Step Revenue Recognition Model to accurately identify performance obligations and allocate transaction prices appropriately across contractual services.

Taiwan Actuarial Practice Standard Approved by the Regulator

Implement localized actuarial assumptions and valuation methodologies in accordance with the IFRS 15 Actuarial Practice Standard approved by Taiwan regulators, ensuring financial reporting and reserve adequacy fully comply with FSC Insurance Bureau requirements.

Actuarial Model Development and Data System Implementation

We developed IFRS 15 calculation models tailored to product characteristics and incorporated service contract revenue recognition mechanisms into the Prophet actuarial platform.

Our solution includes:

• Service contract liability measurement
• Revenue amortization forecasting and analytics
• Model validation and sensitivity testing

In parallel, we collaborated closely with Finance and IT teams to establish:

• IFRS 15 data architecture and governance
• Service revenue and related cost attribution logic
• Expense allocation methodologies and management rules
• System integration and data flow design
• Internal controls and data quality assurance processes

Through strong cross-functional collaboration, we ensured consistency, traceability, and full regulatory compliance across the implementation.

Partner with AC Actuarial Consulting to Navigate the New Regulatory Era

In 2026, Taiwan’s insurance industry enters a new era with the full implementation of IFRS 17, IFRS 15, and TW-ICS.

This transformation requires more than regulatory interpretation—it demands a practical implementation partner capable of translating accounting standards into scalable and automated operating models.

Through this project, AC Actuarial Consulting once again demonstrated strong cross-disciplinary integration capabilities. By bridging actuarial, accounting, and IT functions, we enabled clients to rapidly establish rigorous expense allocation and data management frameworks. Through Prophet model enhancement and comprehensive knowledge transfer, regulatory compliance became a long-term strategic capability rather than a one-time implementation exercise.

No matter how regulations evolve, AC Actuarial Consulting remains at the forefront of the market—combining technical excellence with deep industry experience to help insurance clients plan confidently and move forward with certainty in an increasingly dynamic regulatory environment.