AASB 1023 requires which discount rate to be applied to an outstanding claims liability?

Question

Quizplus · Accepted Answer

AASB 1023 requires the use of risk-free discount rates based on current observable and objective rates to calculate the outstanding claims liability. This is because the discount rate used should reflect the risks inherent in the liability, but not the risks associated with the insurer's own financing or investment activities. Therefore, the risk-free rate is the most appropriate choice for discounting the outstanding claims liability.

AASB 1023 Requires Which Discount Rate to Be Applied to an Outstanding