Shareholders equity has been lowered to $8.1 billion. A term, contractual service margin or CSM, which represents the expected unearned profit of in-force business, was introduced, and this was calculated as $7.3 billion. When added shareholders equity, the total (shareolder equity + CSM) worked out as $15.4 billion.
Some market observers have suggested that the offer by Oversea-Chinese Banking Corporation (OCBC) (SGX:O39
) for Great Eastern Holdings (SGX:G07) (GEH) on May 10 came at an opportune time for the banking group. Here’s why. The switch to IFRS 17 from IFRS 4 shaved $2 billion, or 20%, off GEH’s shareholders equity as reported in FY2021 of $10 billion.
Last year, during a briefing on IFRS 17, which replaces IFRS 4, two items stood out. The first was the change in the level of equity upon transition (as at Jan 1, 2022).
