February 26, 2015 | version française

IAA Monograph on Discount Rates in Financial Reporting presented to the Bank of Portugal

At the request of Instituto dos Actuários Portugueses (IAP) and in close collaboration with Bank of Portugal (BOP), two representatives from the International Actuarial Association (IAA) presented the recently published IAA Monograph on Discount Rates in Financial Reporting to 150 attendees which included actuaries, economists, banking supervisors and accountants, on February 23, 2015.

The session was moderated by José Manuel Mendinhos, President of the IAP. He was joined by Gary Hibbard, past Chair of the Pensions and Employee Benefits Committee and a member of the oversight group appointed to manage the development of this monograph, and Stefan Engeländer, Vice-Chair of the Insurance Accounting Committee.

Their presentation outlined the purpose and the key objectives when discounting for financial reporting, which include:

  • Introduction to discounting and discount rates:
  • Determining discount rates: risk-free and illiquid
  • Life Insurance
    • Participating and unit-linked contracts and applying replicating portfolios
    • Comparison with Solvency II
  • Pensions
    • Similarities and differences between pensions and insurance
    • IFRS financial reporting: IAS19 and IFRS4

Representatives of the BOP and the IAP expressed their gratitude to the IAA for their presentation on this important  topic.

José Manuel Mendinhos said “The IAP is proud to have organized an important seminar on Discount Rates in Financial Reporting. Discount rates are probably the most important factor in evaluating long term liabilities and in the present financial environment in Europe are  certainly the most relevant. This seminar was only possible because of the commitment of Ana Margarida Estrela, the Portuguese member of the IAA Pensions and Employee Benefits Committee, the BOP and the IAA presenters. The IAP is very grateful to those who have contributed to this initiative.”

This monograph forms an important part of the IAA’s research and educational objectives, to facilitate and provide useful educational material that is accessible everywhere, both to actuaries as well as to others involved in actuarial calculations. Presentations such as this help demonstrate to regulatory bodies the scope, availability, and quality of actuarial services offered by actuaries.

To learn more about the work of the IAA on this topic, contact the Secretariat.

You can order your copy of Discount Rates in Financial Reporting A Practical Guide online.