The Impact of IFRS 17 on the Development of Accounting Measurement and Disclosure, in Addition to Improving the Quality of Financial Reports, Considering Compliance with the Requirements of IFRS 4—Jordanian Insurance Companies-Field Study

Abstract

The research examines the impact of applying the IFRS 17 International Financial Reporting Standard on the development of accounting measurement and disclosure to improve the quality of financial reports when considering compliance with the requirements of applying the IFRS 4 International Financial Reporting Standard for Jordanian insurance companies. Achieving the objective, previous studies were examined which related to the impact of applying the IFRS 17 Financial Reporting Standard on the development of accounting measurement and disclosure for improving the quality of financial reports when considering compliance with the requirements of applying the IFRS 4 International Financial Reporting Standard for Jordanian insurance companies. Moreover, the researcher linked the theoretical aspect to the practical aspect. Therefore, the researcher designed a questioner, distributed, and then analyzed the results obtained from the relevant parties. The study found the need to conduct increased research related to the impact of adopting the IFRS 17 International Financial Reporting Standard in improving the quality of reports and overcoming obstacles such as current laws, professional qualifications of those preparing reports for insurance companies, and the situation of auditors. Including the IFRS 4 and IFRS 17 standards in the content of accounting courses can be beneficial for linking academic study with practical practice in several ways: Real-world application, Industry relevance, Compliance and regulation, Career opportunities, Evolving nature of accounting. The need to adjust accounting practices of the International Financial Reporting Standard IFRS 17 is an important step in the field of insurance activity to improve the quality of financial reporting. Owing to the fact that the standard has been allocated only to insurance activity and not to all economic operations, means the application of the standard is limited to all insurance contracts for the duration of contracts, regardless of the nature of the activity of the entity issuing those contracts. Therefore, the study recommends increasing attention on disclosure and improving accounting methods in relation to IFRS 17; this is considered a major step in the insurance business in order to improve the quality of financial reports. Additionally, relevant information is provided for financial reports and similar; this helps improve the level of transparency and quality of the information presented in the core of the reports. Thus, it enables companies to assess the impact of contracts about the current financial position, financial performance, and cash flow.

1. Introduction

The international business environment has witnessed rapid development resulting from economic globalization and the linking of global markets. The outcome is a challenge that has been posed for corporate administrations to improve their level of disclosure and transparency of financial reports in an attempt to rationalize various economic decisions for all listed users [1].

Most notably, the global financial crisis resulted from a wave of collapses, especially in Japan where major insurance companies failed. The most well-known was Chiyoda and Kiwi Life Insurance Services, bankruptcy being the eventual outcome [2].

Avoiding further collapses and to attract domestic and foreign investments, financial institutions are seeking to improve their level of disclosure with respect to their reports, whether they are restricted to the stock market or not [3].

Conversely, providing information for those who use financial reports released by insurance companies that are appropriate, credible, and with a high level of transparency, contributes to rationalizing the economic decisions of users. It reflects positively on the financial performance indicators of the relevant institutions. Accordingly, the International Accounting Standards Board (IASB) has sought to improve the quality of financial reports of insurance companies by adhering to the International Financial Reporting Standard (IFRS 17) [4] to overcome the shortcomings of the International Financial Reporting Standard (IFRS 4) [5], which negatively affected the quality of their financial reports.

2. Research Problem

The insurance sector plays a vital role in the national economy, being one of the important savings organizations that contributes significantly to the process of economic development [6].

The sector has witnessed tremendous recent development with the emergence of new insurance products, including life insurance associated with an investment component. Moreover, the participation of insurance companies, alongside banking institutions, has emerged by linking their insurance documents to banking products as they aim to improve their financial performance indicators [7]. Therefore, it was necessary to provide appropriate information to all parties associated with the company, the only way to improve the quality of financial reporting by insurance companies was to find a unified framework which encompassed recognition, measurement, presentation, and disclosure of insurance operations, in order that company financial reports include a high level of disclosure, transparency, and are comparable at local and international levels, it is possible only through the application of international accounting standards that have all the requirements of good accounting. Thus, the needs of users of financial reports are met, reflecting positively on improving the performance indicators of the companies in question [8].

Resulting from developments, the International Accounting Standards Board (IASB) issued the IFRS 4 International Financial Reporting Standard for insurance contracts in March 2004. The aim was to regulate the accounting practices of insurance companies [9]. The initiative was considered by professionals and those in charge of developing and drafting standards as a temporary step prior to the issuance of a comprehensive accounting standard for insurance contracts governing the recognition, measurement, presentation, and disclosure of financial reports provided by the relevant companies. It was especially important after many criticisms of the IFRS 4 International Financial Reporting Standard had been recorded; problems had risen in practice and had involved several notable organizations such as [10,11,12,13]; At the local level, the insurance sector is one of the important economic sectors that have received great attention on the legislative and professional sides, while on the legislative side, Law No. 10 of 1981 and its amendments were issued, as well as Law No. 118 of 2008 [14].

The insurance sector with regard to financial reporting is a special case, due to the complexity of insurance in terms of the nature of its long-term activity, as well as the difficulties of determining the return compared to other commercial activities, which leads to the difference in the financial statements of the insurance company from any lists of a company in another sector [15].

While on the professional side, the Egyptian standards were amended in 2015 to comply with international standards, including financial reporting standards (IFRS/IAS), which included the international financial reporting standard IFRS 4. Which was translated under the name of Egyptian Accounting Standard No. 37 “Insurance Contracts” [16].

3. Objectives

The Research article Aimed to:

• Determine the positive impact of using IFRS 17, as an alternative to IFRS 4, on the financial statements and key performance indicators of insurance companies.
• Develop clear and consistent rules for recognizing, measuring, presenting, and disclosing insurance contracts. The standard enhances the comparability of financial statements, allowing stakeholders to make more informed decisions about the performance and financial position of insurance companies.
• Maintains compliance with other international accounting standards, avoiding divergent accounting practices for identical insurance contracts. Improve the level of disclosure and transparency in financial reports.
• The application of IFRS 17 contributes to improving the quality of financial reporting and providing more transparent and relevant information on how the profits or losses of insurance companies are determined in relation to the insurance services provided, as well as the investment profits of insurance premiums collected from customers.

4. Theoretical Framework and Previous Studies

IFRS 17 introduces a new approach to measuring insurance contracts, called the “building block approach”, which requires companies to separately measure the components of insurance contracts, such as the probability of claims, the time value of money, and the risk adjustment. This approach is intended to provide a more accurate reflection of the value of insurance contracts and their associated risks.

The main objective of drafting any accounting standard is to improve the quality of financial reporting, and as a result of the problems of practical application of IFRS 4, which negatively affected the quality of financial reports of insurance companies and the inappropriateness of the information contained therein, and accordingly, the International Accounting Standards Board (IASB) issued IFRS17 for the purpose of developing requirements for measuring and disclosing financial reports for insurance companies and improving the quality of information contained in these reports [17].

It aims to provide more transparent and comparable financial reporting for insurance contracts, which are complex financial instruments that have long-term obligations and often involve significant risks and uncertainties. IFRS 17 aims to improve the accuracy and consistency of financial reporting for insurance contracts across different jurisdictions and industries.

The insurance sector plays an important role in the economies of countries; therefore, it has received great attention from academics and professionals. Previous accounting approaches focused on the impact of the application of the International Financial Reporting Standard No. IFRS 17. The focus is directed toward the development of accounting measurement and disclosure, as well as improving the quality of financial reports in accordance with compliance and the requirements of International Financial Reporting Standard IFRS4 for Jordanian insurance companies.

The commitment to the application of the International Financial Reporting Standard IFRS 4 in insurance companies contributes to improving the level of measurement and disclosure of their financial reports, increasing the level of transparency in financial statements and making them comparable at the local and international levels, which supports trust between those companies and their associated parties [8].

Compliance with the financial reporting standard IFRS 4 insurance companies is imperative to improve the level of measurement and disclosure in the financial statements, which entails meeting the needs of all parties associated with the company of appropriate information to evaluate financial performance and rationalize their various investment decisions [18].

The implementation of IFRS 4 has not contributed to improving the quality of financial reporting to the desired level, so the IASB should develop IFRS 4 to avoid criticism related to the application in practice [19].

Both the commitment to adopt the International Financial Reporting Standard IFRS 4 and the efficiency of financial reporting preparers to apply those standards as well as the integrity of the data used in light of a consistent framework of legal legislation contribute to improving the quality of financial reporting, but the development of the International Financial Reporting Standard IFRS 4 should be consistent with other international standards in order to ensure improved quality of financial reporting for insurance companies [20].

The application of the financial reporting standard IFRS 4 generated many criticisms, the most important of which was the inconsistency between it and the international standard IAS 39 with regard to the evaluation of the assets and liabilities of insurance companies as well as acquisition problems, and therefore the study recommended the need to develop the financial reporting standard IFRS 4 to address the deficiencies that negatively affected the quality of the financial report [21].

Clarify the appropriateness of applying revenue recognition requirements in accordance with the International Financial Reporting Standard IFRS 4 in Iraqi insurance companies and measuring the impact on improving the quality of financial reports, where the study dealt with several research points, the most important of which was how to form profits and losses in insurance companies by loading customers’ account with risks and investment premium, and clarifying what risks borne by those companies and resulting from the issuance of insurance contracts. The study concluded that it is necessary to oblige Iraqi insurance companies to international financial reporting standards in order to improve the quality of their financial reports as an initial step until the development of those standards and the issuance of a comprehensive standard for insurance contracts only in order to make the financial statements of insurance companies comparable and standardized at the international level [7].

On the professional side, the Egyptian standards were amended in 2015 to comply with international standards, including financial reporting standards (IFRS/IAS), including the International Financial Reporting Standard IFRS 4, which was translated under the name of Egyptian Accounting Standard No. 37 “Insurance Contracts” [22].

Significantly, the IASB (International Accounting Standards Board) started to develop comprehensive methodology that is compatible with accounting in insurance companies [23]. The board issued the IFRS 4 Financial Reporting Standard temporarily until the adoption of IFRS International Financial Reporting Standards on a wide international scale, especially companies listed on international Stock Exchanges [8].

The insurance sector with regard to financial reporting is a special case, due to the complexity of insurance in terms of the nature of its long-term activity, as well as the difficulties of determining the return compared to other commercial activities, which leads to the difference in the financial statements of the insurance company from any lists of a company in another sector [10].

The IFRS 4 International Financial Reporting Standard for insurance contracts aimed to improve matters by providing accounting methods that would enhance the quality of financial reports of insurance companies. Thus, the needs of users of these reports would be met by providing relevant information that helps estimate future cash flow as well as recognizing the degree of uncertainty related to those flows [11].

The application of the financial reporting standard IFRS 4 generated many criticisms, the most important of which was the inconsistency between it and the international standard IAS 39 with regard to the evaluation of the assets and liabilities of insurance companies as well as acquisition problems, so the study recommended the need to develop the financial reporting standard IFRS 4 to address the deficiencies that negatively affected the quality of the financial report [24].

Conversely, the International Accounting Standards Board, when drafting the IFRS 17 International Financial Reporting Standard, explained that there were reasons and justifications that called for its need. They are detailed in the issuance of the standard and are represented in the following.

Reasons were stated in the issuance of the standard: IFRS 17:

• The international standard for financial reporting IFRS 4 is an interim standard, it allowed the use of different accounting practices for insurance contracts; these negatively reflected on the quality of financial reports and the inappropriateness of the information contained therein for its users, investors, and financial analysts [19].
• There are complications related to the measurement process of insurance contracts: the length of the insurance contract period, the associated risks, and the lack of trading of those contracts in financial markets. In addition, insurance contracts may include investment components [25].
• Many financial statements issued by insurance companies lack periodic updating as to the value of insurance liabilities, as well as risks that reflect the impact of changes in the economic environment, such as changes in interest rates [26].
• IFRS 4 Financial Reporting Standard allows insurance companies to use different accounting policies with identical insurance contracts, as a result it is impossible to make comparisons between the financial reports of insurance companies [8]. The statement is confirmed by a study [21]. Clarifying the Impact of Applying IFRS 4 International Financial Reporting Standard on Insurance Companies in Improving the Qualitative Characteristics of Accounting Information, contained in the financial reports of the companies. The research relied on conducting a comparative study on a sample of Nigerian companies before and after the application of the IFRS 4 Financial Reporting Standard. The research concluded that Nigerian companies operating in the insurance sector toward the application of IFRS 4 Financial Reporting Standard had significantly contributed to improving the level of disclosure and transparency of financial reports, making them more suitable for their users and comparable to the local and international levels.

Research [27] clarified the Impact of the International Financial Reporting Standards (IFRS) on enhancing the suitability of accounting information contained in the financial reports of insurance companies listed in the Stock Exchange. The study relied on the use of the Harris valuation model and the Ohlson model in measuring the relationship between the book value, market value, and profits of companies shares that fell within the sample of the research.

The research found that there was a significant impact on the value of profits, whether before or after the application of the relevant standards; the research also found that the characteristics of companies enhance the relevance and affect the suitability of information contained in the financial reports.

The main objective of drafting any accounting standard is to improve the quality of financial reporting, and as a result of the problems of practical application of IFRS 4, which negatively affected the quality of financial reports of insurance companies and the inappropriateness of the information contained therein, and accordingly, the International Accounting Standards Board (IASB) [28] issued IFRS17 for the purpose of developing requirements for measuring and disclosing financial reports for insurance companies and improving the quality of information contained in these reports [29].

Compliance with the financial reporting standard IFRS 4 insurance companies is imperative to improve the level of measurement and disclosure in the financial statements, which entails meeting the needs of all parties associated with the company of appropriate information to evaluate financial performance and rationalize their various investment decisions [30].

Moreover, the research [23] aimed toward clarifying the impact of applying IFRS International Financial Reporting Standards on enhancing the qualitative characteristics of accounting information contained in financial reports, made the reports more convenient for users from various parties associated with the company.

The research relied on conducting a comparative study between several European countries for a number of companies listed on the stock exchange before and after applying the criteria. The study concluded that the difference in accounting practices between countries made it necessary to apply international financial reporting standards. This was required in order to improve the quality of reports and enhance the qualitative characteristics of accounting information to make the data more relevant.

These results were confirmed by a study by [26] that evaluated the effectiveness of the International Financial Reporting Standard IFRS 17 on enhancing the qualitative characteristics of accounting information contained in the financial reports of insurance companies. The findings of the study ensured that there was an accord between the study sample and the impact of the application of the International Financial Reporting Standard IFRS 17 on improving the content of financial reports of companies’ insurance and strengthening of the qualitative characteristics of the accounting information contained.

Thus, it can be concluded that the International Accounting Standards Board IASB issued the IFRS 17 International Financial Reporting Standard to achieve a number of objectives as stated in [4,12,20,25].

4.1. The Impact of Insurance Contracts on the Financial Performance and Financial Indicators of Insurance Companies

The result of the study by [31] “Evaluation of IFRS 17 Insurance Contracts Standard for Insurance Companies “describes the Measurement and Disclosure Details Contained In the International Standard for Financial Reporting IFRS 17, addressing the most important amendments to the standard of insurance contracts IFRS 4.

A sample of insurance companies listed on the European stock market was the basis of the research. The study concluded that the application of the Financial Reporting Standard for insurance contracts IFRS 17 as an alternative to the International Reporting Standard IFRS 4 would contribute significantly to improving the measurement and disclosure requirements in the financial reports of insurance companies. Therefore, the quality of accounting information contained in those reports would be enhanced, making them more convenient and comparable with the financial reporting of other insurance companies at the international level.

Furthermore, a study [13] clarifying the role of legislation and accounting standards related to the field of insurance, in improving the level of disclosure and transparency of financial reports, as well as the impact on risk management, was conducted on several banks listed on the Romanian Stock Exchange. The research found that there was a conflict between legislation and accounting standards which led to a distortion of the information contained in financial reports. They became misleading to users; consistency between the prevailing legislation and laws in the country on the one hand and accounting standards on the other is needed. It is especially important as the trend is toward applying the International Financial Reporting Standard 17 for insurance contracts to improve the quality of financial reports.

Both the commitment to adopt the International Financial Reporting Standard IFRS 4 and the efficiency of financial reporting preparers to apply those standards as well as the integrity of the data used in light of a consistent framework of legal legislation contribute to improving the quality of financial reporting, but the development of the International Financial Reporting Standard IFRS 4 should be consistent with other international standards in order to ensure improved quality of financial reporting for insurance companies [32].

Target for the research was [12]; clarified the most important changes in the standard of insurance contracts IFRS 4 in addition to the role of the International Financial Reporting Standard IFRS 17 in improving the quality of financial reports of insurance companies. Moreover, the study addressed the measurement and disclosure requirements contained in the IFRS 17 reporting standard, as well as how to present financial statements and the valuation of assets at current value by using future cash flows.

The research found the variation in accounting in IFRS 4 reporting standards negatively affected the quality of financial reports, necessitating the need to apply the International Financial Reporting Standard for insurance contracts IFRS 17th. The research concluded that reconciliation involving the requirements of the international standard for financial reporting IFRS 17 as an alternative to the IFRS 4 Financial Reporting Standard is a necessity. The reason is there is a significant impact when improving the quality of financial reports of insurance companies; appropriate information on financial performance indicators is enhanced, as are cash flows in order to rationalize investment decisions for users.

Conclusions are confirmed by a study [11] clarified the impact of applying the IFRS 17 International Financial Reporting Standard on improving the quality of financial reports for insurance companies, making them more convenient for their users and comparable with other insurance companies at local and international levels. The study addressed the requirements for disclosure of financial reports, in addition to measurement methods and recognition of profits, losses and other comprehensive income. The study concluded that the drafting and issuance of the IFRS 17 Financial Reporting Standard came as a result of many criticisms of the IFRS 4 insurance contracts standard. Therefore, it is necessary to move toward adopting the Financial Reporting Standard IFRS 17 in order to improve the quality of company financial reports for insurance companies.

The main objective of the IASB drafting and issuance of the IFRS 17 international financial reporting standard for insurance contracts is to develop requirements for recognition, measurement, and accounting disclosure contained in IFRS 4; this will improve the quality of financial reports of insurance companies and make them more convenient for their users and comparable at the local and international levels.

4.1.1. First: Scope of Application of the International Financial Reporting Standard for Insurance contracts IFRS 17

Due to the importance of the insurance sector, the International Accounting Standards Board has sought to address the shortcomings of the IFRS 4 International Financial Reporting Standard that negatively affected financial reporting, by issuing a standard that addresses all aspects of financial reports of companies issuing insurance contracts. The aim is to answer the following questions as stated in the study [19,25].

• Is there a need to issue a standard that deals only with companies that issue insurance contracts in order to ensure the consistency of financial reporting internally?
• How will the new standard establish a unified definition of the insurance company, which can be applied consistently at international level, taking into account the different laws and legislations from one country to another?
• Is the application of the standard limited to insurance companies only, there are companies other than insurance companies that issue insurance contracts?
• Is the application of the standard limited to insurance contracts issued only?
• What is the position of the standard of other activities practiced by insurance companies other than insurance activities?

To overcome these complexities, the optimal solution is to allocate the standard only to the insurance activity and not to the entity. Therefore, IFRS 17 is applied to all insurance contracts included in its scope for the duration of the contracts, regardless of the nature of the activity of the entity issuing those contracts.

The research indicates that the IFRS 17 International Financial Reporting Standard is an important step in adjusting accounting practices of insurance activity and improving the quality of financial reporting.

By extracting the third paragraph of IFRS 17, the researcher finds that there is a specific range of contracts to which the standard applies [4].

4.1.2. Second: The Impact of the Application of the IFRS 17 International Financial Reporting Standard on the Development of Accounting Measurement and Disclosure in the Financial Reports of Insurance Companies

• Insurance contracts issued by the company:

An insurance contract is defined according to IFRS 17 as “a contract whereby one party (the issuer of the contract) accepts to assume significant insurance risks from another party (the policyholder) by agreeing to compensate the policyholder “insurance policy” in the event of an uncertain future event (the insured risk) adversely affecting the policyholder (IFRS17 appendix).

The concept of the insurance contract contained in the standard is based on four essential elements that must be met in the insurance contract in order to apply the standard:

• Insurance risks.
• The insurance risks are significant.
• The future event is uncertain.
• A negative impact will result if the insured event occurs.

Insurance risks represent the essence of the insurance contract, if the contract transfers to the insurance company only financial risks without insurance risks, then it is not considered an insurance contract. Some insurance contracts do not transfer any insurance risks to the company at the beginning, they may transfer the risks at a later date.

In addition, insurance risks must be significant; this happens if the insured event in the contract results in significant additional payments incurred by the company and a total loss for the contract. It means the present value of additional payments is greater than the present value of the amounts payable if the insured event does not occur. Therefore, to assess whether this situation already exists, insurance companies should rely on the present value, using a discount rate reflecting the time value of money, cash flow characteristics, and liquidity characteristics of the insurance contract [26].

2.

Reinsurance contracts:

Insurance companies resort to transferring insurance risks to another party by using a reinsurance company to protect them from any major losses on insurance contracts issues; this is completed under contractual agreements included in the insurance contract [31].

A reinsurance contract is defined by IFRS 17 as “an insurance contract issued by a reinsurance company for the purpose of compensating another insurer for losses arising from one or more of the contracts issued [4,25]”.

IFRS 17 has considered the nature of reinsurance contracts that are different from issued insurance contracts; this the standard requires measurement and disclosure independent of issued contracts within its range, in order to provide detailed financial information about the nature of the contracts and their impact on financial performance [33].

The research concludes that the requirements of IFRS 17 for assessing significant insurance risks with a reinsurance contract are the same as the requirements for assessing significant insurance risks with an insurance contract. Additionally, intermediary insurance companies (between the original insurance company and the reinsurance company) will not be affected by the standard since they do not issue insurance contracts; their activity is limited to coordinating and arranging insurance coverage with clients (other insurance management companies) on behalf of the insurance company.

3.

Investment contracts with optional participation features

An investment contract that contains an optional participation feature is defined by IFRS 17 as “a contract that grants the holder the right to receive additional payment benefits as a supplement to guaranteed benefits, taking into account that the determination of the amounts and timing of those benefits is contractually subject to the discretion of the contract issuer, the company issuing the contract”.

The benefits depend on any of [4,19,25]:

The performance of a specific set of contracts or a specific type of contract.

• Realized and/or unrealized investment returns on a certain set of assets held by the issuing insurance company.
• Profits or losses of the company issuing the insurance contract.

Investment contracts that contain optional participation features are one of the most significant problems when applying IFRS 17. Despite the availability of legal insurance contracts, they lack the essence of the definition of an insurance contract. They do not transfer significant insurance risks [4].

Additionally, the scope of application of IFRS 17 includes investment contracts that contain optional participation features and are not considered financial instruments to which IFRS 9 applies, provided that the same company issues insurance contracts [4,25].

The researcher concludes that allowing the application of IFRS 17 or IFRS 15 for service contracts with fixed fees is considered a kind of flexibility; it enables companies that issue both types of contracts to be accounted in the same way.

4.1.3. Third: Recognition of Insurance Contracts

The IFRS 17 International Financial Reporting Standard is based on several items for the recognition of insurance contracts, the research displays accordingly:

• Timing of recognition of issued insurance contracts

Under IFRS 17, in the post-consolidation phase, a company should note a set of insurance contracts that it has issued early as follows [4,25]:

• The beginning of the coverage period of the insurance contract group.
• The due date of the first payment from the policyholder in the group of insurance contracts.
• According to the facts and circumstances, the company should be aware when the group becomes loaded with losses prior to the start of coverage.

2.

Recognition of cash flow for the acquisition of insurance contracts

• The IFRS 17 standard states that the assets or liabilities of cash flows for the acquisition of insurance, related to the group of issued insurance contracts, should be recognized. Immediately following the company withdraws official recognition of these assets or liabilities arising from the cash flows for the acquisition of insurance, recognizing the group of insurance contracts to which these cash flows were subject [4,25].
• Research shows that the IFRS 17 International Financial Reporting Standard requires measurement and presentation; cash flows be included in the book value of groups of insurance contracts, conversely as to what happened with acquisition costs.

3.

Timing of recognition of retained reinsurance contracts

• Reinsurance contracts have a different nature from insurance contracts issued by a company, they are designed to cover claims incurred under the basic insurance contracts during a specific period.
• IFRS 17 states that retained reinsurance contracts are recognized as follows: [4,25]

  (A)

  If the retained reinsurance contracts cover the loss of the group of insurance contracts on a proportional basis, the retained reinsurance contract group is recognized at the beginning of the coverage period of the reinsurance contracts, or at the initial recognition of the basic insurance contracts, whichever is earlier.

  (B)

  If the group of reinsurance contracts held covers the total losses resulting from the group of insurance contracts exceeding a specified amount, the group of insurance contracts held is recognized at the beginning of its coverage period.

• Research suggests that the requirements of the IFRS 17 International Financial Reporting Standard regarding the processing of reinsurance contracts held have been amended considering the following:

• The company does not recognize the group of reinsurance contracts held until at least one of the basic insurance contracts is recognized.
• Groups of reinsurance contracts held are considered assets, not liabilities.
• The company that holds the reinsurance contracts pays an amount to the reinsurance company; this is considered as an implicit part of the premium, not profits resulting from reinsurance contracts.

4.2. Timing of the Recognition of the Investment Contract, which has an Optional Participation Feature

IFRS 17 states that the date of initial recognition of investment contracts containing optional participation features is the date on which the company becomes a party to the contract [4,25].

Research concludes that the main reason is due to the lack of a pre-coverage period, characterized by insurance contracts that require operational processes.

4.3. Recognition When Compiling Business and Financing Insurance Contracts

When a company acquires issued insurance contracts or retained insurance contracts, it should, in accordance with paragraphs 14, 16 of IFRS 17, which concerns the grouping of insurance contracts, identify groups of acquired contracts.

Research concludes that transferred or acquired contracts are treated in accordance with IFRS 17, as if concluded on the date of the acquisition “aggregation or transfer”.

Fourth: Measurement

Examining the IFRS17 standard, research finds the standard has developed three approaches measuring the range of insurance contracts within its scope [4,19,25,33].

• curriculum “entrance” general model “, a compulsory measurement model.
• the “entrance” method of variable fees.
• the “entrance” approach to the allocation of installments

First: The First Measurement

Subject to eligibility, the approach applies to all insurance contracts except for insurance contracts that have direct participation features (to which the variable fee approach applies) and short-term insurance contracts to which the premium allocation approach applies [31] where eligible.

This approach is based on basic components that together form the basis of measurement; these components are divided into two groups as follows: [4,19,25].

First group: fulfillment of cash flows and includes the following:

• Estimates of future cash flows.
• Discount rates.
• Risk adjustment for non-financial risks.

Second group: contractual service margin

Considering the components of the “entrance” curriculum for the general model, clarification is needed:

The first group: fulfillment of cash flows.

The term cash flow fulfillment refers to estimates of the present value of the amounts that the company expects to collect from installments and pay for claims, benefits, and expenses related to the group contract, considering uncertainty (risk adjustment), time value of money, and the impact of financial risks (discount rates) [4,19,25].

Paragraph 59 of IFRS 17 states that when applying the premium allocation approach, the company recognizes cash flows for the acquisition of insurance as expenses when incurred, provided that the coverage period for each intra-group contract is one year or less [4,25].

One study stressed that as long as the set of insurance contracts is not loaded with losses (an assumption on the basis of which this approach is chosen), during the initial measurement, this approach does not specify the components used in measuring the insurance contract. Unlike the general model, it does not require a clear measurement to estimate future cash flows and the time value of money and risks [11].

The initial measurement using the “entrance” approach of premium allocation for the remaining obligations is performed according to the following steps [4,19,25]

• Premiums received upon initial recognition (if any).
• Less cash flow for the acquisition of the insurance contract on the date; unless the company chooses to recognize the payments immediately after they are incurred.
• Plus, or minus any amounts resulting from the withdrawal of official recognition at the date of initial recognition of cash flows for the acquisition of insurance that were previously considered assets or liabilities before that date.

Second: Subsequent Measurement

The general measurement model includes two main components:

• First of which is the fulfillment of cash flows, this depicts a direct measurement based on estimates of the present value of future cash flows, adjusted by an explicit measurement of a quid pro quo reflecting the non-financial risks born by the company “risk adjustment”.
• Second is the margin of contractual service, a pivotal and complex component that includes a significant limitation for companies in subsequent measurements of obligations of insurance contracts.

Conversely, at the end of each financial period, there should be reports containing the changes that occurred during the period of insurance obligations. The reason is to determine which of these changes relate to future services, which relate to current services, and which relate to past services. Thus, it will be possible to determine the impact of these changes on the financial position and financial performance of the company [11,12].

Paragraph 40 of IFRS 17 dealt with the concept of the book value of the liabilities of a group of insurance contracts at the end of the period, in accordance with the general measurement model. It was explained that they consisted of the component of residual coverage obligations and the components of incurred claims obligations (**) [4,25]

IFRS 17 requires the allocation of the on-going amount of the contractual service margin, adjusted with respect to the changes required by the standard (changes in estimates of future unrealized profits, changes in insurance financing income or expenses, differences arising from changes in foreign exchange rates), to current and future services, the services are based on the coverage units of the group, the part allocated for the current period is recognized in profit and loss within revenue (as a result of insurance services). The remaining part represents unrealized profits related to future services that the company will provide under contracts within the group [31,33].

Research concludes there is consistency between the IFRS 17 and IFRS 15 Financial Reporting Standards with regard to the subsequent measurement of the margin of contractual service; this would improve the quality of financial reports and make the information contained therein more convenient for users.

Paragraph 45 of IFRS 17 states that the book value of the contractual service margin for a group of contracts containing direct participation features at the end of the reporting period is equal to the book value at the beginning of the period adjusted for the following specific amounts [4,25]

• The effect of adding any new contracts to the set of insurance contracts.
• Accounting for the company’s share of the change in the value of implicit items.
• Changes in the fulfillment of cash flows.
• Effect of changes in exchange rates related to the margin of contractual service.
• The portion of the contractual service margin recognized as insurance income for services rendered during the period is determined by the distribution of the remaining contractual service margin at the end of the period over the current and future coverage period.

Third: Presentation of Financial Statements

• Presentation in the statement of financial position

IFRS 17 requires an entity to separately present the sum of both the assets and liabilities of issued insurance contracts and reinsurance contracts held in the balance sheet [4,25].

Research advises that the purpose of displaying the total assets and liabilities of issued insurance contracts and reinsurance contracts, held separately in the financial position statement, is to enhance transparency and improve the quality of information contained in financial reports.

One study indicated that under the application of IFRS 4, there are different practices for displaying the rights and obligations of insurance contracts in the balance sheet. Conversely, IFRS 17 aims to adjust these practices to improve the quality of financial reporting. It requires the company to display the rights and obligations arising from groups of contracts in net value for each in one item, as if they were the assets or liabilities of a single insurance contract in the balance sheet. Taken into account is the separation of the components of the insurance contract, such as implicit derivatives and investment components which can be distinguished and be treated in accordance with other standards [34].

The researcher believes that preventing IFRS 17, not to set-off between groups of insurance contracts representing assets and groups of insurance contracts representing liabilities, is consistent with the requirements of IAS 1; this states that the company may not set-off assets and liabilities, and this would improve the quality of financial reporting.

2.

Performance List

IFRS 17 requires a company to classify the amounts recognized in the profit or loss statement and other comprehensive income statements as follows [4,25]:

(A)

The result of insurance services includes insurance income and expenses for insurance services.

(B)

Insurance financing income or expenses.

Fourth: Disclosure of Financial Reports

Disclosure of financial reports refers to the practice of making information about a company’s financial performance and condition available to its stakeholders, such as investors, creditors, and the general public. Financial reports can include a range of financial statements, such as balance sheets, income statements, cash flow statements, and statements of changes in equity, as well as other financial data and analysis.

The disclosure requirements of IFRS 17 aims to provide appropriate information on financial reports and supplementary clarifications, to improve the transparency and quality of the information presented; thus, enabling users to assess the impact of contracts falling within the scope of the standard regarding the financial position, financial performance, and cash flows of the company [4,19,23].

Aiming to meet the stated requirements, the company should disclose quantitative and qualitative information that reflects its circumstances clearly as follows [4,25]:

• The amounts recognized in the body of financial reports with reference to contracts that fall within the scope of IFRS 17.
• Important provisions and changes that are made resulting from the application of the IFRS 17 Financial Reporting Standard.
• The nature and extent of the risks arising from contracts within the scope of the IFRS 17 Financial Reporting Standard.

4.4. Important Provisions and Changes Resulting from of the Application of the Financial Reporting Standard IFRS 17

Paragraph 117 of IFRS 17 states that significant provisions as well as changes in the provisions used when applying the standard should be disclosed; specifically, the company should disclose inputs, assumptions, and estimation methods it uses as follows [4,25]:

(A)

Methods used to measure insurance contracts that fall within the scope of the IFRS 17 Reporting Standard.

(B)

Changes in the methods and processes in estimating the inputs used in the measurement of contracts.

(C)

Methods used in determining both investment components, discount rates and risk adjustment for non-financial risks.

(D)

Disclosure of the level of confidence used in the calculation of risk adjustment for non-financial risks.

(E)

Disclosure, with an explanation of the methods used to determine the income or expenses of insurance financing recognized in profit or loss, if the company chooses to separate these expenses between profit and loss and comprehensive income.

(F)

Disclosure of the yield curve used to discount cash flows.

Research shows the inclusion of the IFRS 17 International Financial Reporting Standard for disclosure; however, its main objective is to improve the level of disclosure and transparency in financial reporting.

5. Research Hypotheses

Regarding the research presented and previous research for achieving the study objective to reach the impact of the International Financial Reporting Standard No. IFRS 17 on the development of accounting measurement and disclosure and improving the quality of financial reports considering compliance with the requirements of the application of the International Financial Reporting Standard IFRS4 for Jordanian insurance companies, the research formulates the following main hypothesis:

5.1. The Main Hypothesis

Jordanian insurance companies cannot apply IFRS 17 to the development of accounting measurement, disclosure, and improving the quality of financial reports concerning compliance with the requirements of applying the IFRS 4 International Financial Reporting Standard for Jordanian insurance companies.

The following are the sub-hypotheses results:

• There is no statistically significant relationship between the application of IFRS 17 and the development of recognition, measurement, improvement of presentation and disclosure of financial reports of Jordanian insurance companies.
• There is no statistically significant relationship between the application of IFRS 17 and the improvement of the quality of financial reports of Jordanian insurance companies.
• There is no significant relationship between the application of IFRS 17 and compliance with the requirements of IFRS 4 for Jordanian insurance companies.

5.2. Study Sample and Statistical Analysis

Realizing the value of scientific research and completing objectives, theory must be linked to practice; this was carried out by verifying the validity of findings within the theoretical framework. The hypotheses were tested by designing a survey to poll the opinions of a specialists in the field, and analyzing the opinions received.

6. Sample Study

First: The sample was chosen arbitrarily according to each group of the study population as follows:

(1) Faculty members of the accounting department.

• The researcher selected a sample of 62 individual faculty members in the field of accounting, professor, an assistant professor, and a teacher.

(2) Financial reporting preparers of Jordanian insurance companies listed on the Amman financial market.

• A total of 63 individuals responsible for preparing financial reports at Jordanian insurance companies listed on the Amman financial market.

(3) Audit and accounting office operating in Jordan

• A total of 36 individual accountants and auditors from accounting and auditing major firms [19,25].

(4) Financial analysts

• A total of 37 individual financial report analysts from the members of the CFA Financial Analysts Association.

Second: Determining the response rate and the validity of the recovered lists for statistical analysis (

Table 1. Response rate and validity of lists retrieved for statistical analysis.

Survey Sample	Distributed Lists		Recovered Lists		Recovered Lists Invalid for Stoical Analysis	Recovered Lists Valid for Statistical Analysis
	No.	Percent	No.	Percent		No.	Percent
Faculty members	3	5%	52	84%	62	49	94%
Accounting and auditing offices	2	6%	31	86%	36	29	93%
Financial reports of insurance companies	6	11%	54	86%	63	48	89%
Financial analysts	4	12%	34	92%	37	30	88%
Average/Total	15	9%	171	86%	198	156	91%

Results of statistical analysis of data and testing of study hypotheses. Statistical analysis of the survey list items.

and

Table 2. Honesty and accuracy for the entire poll list (Kronbach Alpha Test).

Number of Phrases	Honesty Factor	Coefficient of Stability (Alpha)
41	0.975	0.950

).

Measuring the variability (extent of agreement and disagreement) in the sample (

Table 3. Measuring the variability (extent of agreement and disagreement) in the sample groups opinions depending on the job title (P—ANOVA TEST).

Statements	Job Title	No.	Value F-Test
Jordanian insurance companies cannot apply IFRS 17 to the development of accounting measurement, disclosure and improving the quality of financial reports concerning compliance with the requirements of applying the IFRS 4 International Financial Reporting Standard for Jordanian insurance companies	Faculty members	49	0.544
	Insurance companies	29
	Accounting and auditing offices	48
	Financial analysts	30
	Summary	156
There is no significant relationship between application of IFRS 17 and the development of recognition, measurement and improved presentation and disclosure of financial reports from Jordanian insurance companies.	Faculty members	49	0.432
	Insurance Companies	29
	Accounting and auditing offices	48
	Financial analysts	30
	Summary	156
There is no statistically significant relationship between the implementation of IFRS 17 and the improvement in the quality of financial reports from Jordanian insurance companies.	Faculty members	49	0.812
	Insurance Companies	29
	Accounting and auditing offices	48
	Financial analysts	30
	Summary	156
There is no significant relationship between the application of IFRS 17 and compliance with the requirements of IFRS 4 for Jordanian insurance companies.	Faculty members	49	0.455
	Insurance Companies	29
	Accounting and auditing offices	48
	Financial analysts	30
	Summary	156

and

Table 4. Measuring the variability (extent of agreement and disagreement) in the sample groups opinions depending on the academic qualification (P—ANOVA TEST).

Statements	Job Title	No.	T Value F-Test
Jordanian insurance companies cannot apply IFRS 17 to the development of accounting measurement, disclosure, and improving the quality of financial reports concerning compliance with the requirements of applying the IFRS 4 International Financial Reporting Standard for Jordanian insurance companies	Doctorate	51	0.596
	Masters	46
	Professional Diploma	15
	Bachelor	44
	Summary	156
There is no significant relationship between the application of IFRS 17 and the development of recognition, measurement and improved presentation and disclosure of financial reports for Jordanian insurance companies	Doctorate	51	0.694
	Masters	46
	Professional Diploma	15
	Bachelor	44
	Summary	156
There is no statistically significant relationship between the implementation of IFRS 17 and the improvement in the quality of financial reports by Jordanian insurance companies.	Doctorate	51	0.586
	Masters	46
	Professional Diploma	15
	Bachelor	44
	Summary	156
There is no significant relationship between the application of IFRS 17 and compliance with the requirements of IFRS 4 for Jordanian insurance companies.	Doctorate	51	0.695
	Masters	46
	Professional Diploma	15
	Bachelor	44
	Summary	156

).

An F-test score above 0.05 indicates that there are no differences in the opinions of the respondents according to the main hypothesis. There is agreement that the application of the International Financial Reporting Standard IFRS 17 in Jordanian insurance companies will lead to the development of accounting measurement and disclosure. Moreover, it will improve the quality of the financial reports of the companies with respect to the clarity of the relationship between the application of standard no.17 with commitment to the application of standard No. 4 between the opinions of the targeted in the Jordanian insurance companies with the sub-hypotheses.

An F-test value more than 0.05 for all elements indicates that there are no differences in the opinions of the respondents according to the main hypothesis and there is agreement that the application of the International Financial Reporting Standard IFRS 17 for Jordanian insurance companies will be beneficial. It will lead to the development of measurement and accounting disclosure and an improvement in the quality of the financial reports of the companies. A clarity will ensue between the relationship of the application of standard no.17 with a commitment to the application of standard No. 4 between the opinions of the targeted Jordanian insurance companies with the sub-hypotheses.

6.1. Statistical Analysis of Data Related to the Main Hypothesis and Its Testing

Descriptive analysis and the results of the validity and reliability of the elements that determine IFRS 17 cannot be applied to the development of accounting measurement and disclosure to improve the quality of financial reports regarding compliance with the requirements of applying IFRS 4 for Jordanian insurance companies (

Table 5. Descriptive analysis and the results of the validity and reliability of the elements of IFRS 17 requirements regarding compliance with the requirements of applying IFRS 4.

Jordanian Insurance Companies cannot apply IFRS 17 to the Development of Accounting Measurement, Disclosure and Improving the Quality of Financial Reports Concerning Compliance with the Requirements of Applying the IFRS 4 International Financial Reporting Standard for Jordanian Insurance Companies	Coefficient	Mean	Standard Deviation	Value T-Test	Percentage Weight	Percentage Value
There is no statistically significant relationship between the application of IFRS 17 and the development of recognition, measurement, improvement of presentation and disclosure of financial reports of Jordanian insurance companies.
1. The contract is recognized when substantial risks are transferred to the company or when one of the parties completes an obligation.	** 0.000	3.27	1.511	** 0.000	74%	10
2. The group of reinsurance contracts is not recognized until at least one of the basic insurance contracts is approved.	** 0.000	3.56	1.235	** 0.000	74%	12
3. Investment contracts containing optional participation features are recognized on the date the company becomes a party to the contract.	** 0.000	3.71	1.201	** 0.000	73%	15
4. Acquired contracts are treated as if concluded on the date of acquisition or transfer.	** 0.000	3.86	1.049	** 0.000	73%	14
5. Acquisition costs are included in the book value of insurance contracts.	** 0.000	3.51	1.189	** 0.000	73%	7
There is no statistically significant relationship between the implementation of IFRS 17 and the improvement in the quality of financial reports of Jordanian insurance companies.
6. Cash flow estimates are developed in an objective way to reflect the conditions existing at the measurement date and be consistent with market prices to reduce the degree of uncertainty and improve the relevance of information.	** 0.000	3.64	1.117	** 0.000	73%	16
7. Discount rates are determined that reflect the characteristics of cash flow arising from insurance contracts; therefore, the lack of options for setting these rates contributes to improving the quality of the financial report.	** 0.000	3.91	1.291	** 0.000	78%	1
8. Risk adjustment (non-financial risks) contributes to improving the quality of the financial report by distinguishing between generated and risk-free liabilities, providing information on recognized profit and economic burdens resulting from undertaking the risks.	** 0.000	3.69	1.096	** 0.000	74%	13
9. The use of the variable fees for contracts that contain optional participation features reflects the different nature of these contracts, leading to the provision of information characterized by relevant and honest representation.	* 0.000	3.87	1.072	** 0.000	77%	2
10. Using the installment allocation portal, if the coverage period of each contract is one year, adopting the most reasonable estimate, this contributes to improving the quality of information contained in financial reports.	** 0.000	3.75	1.031	** 0.000	75%	8
11. Reinsurance contracts are accounted for separately from issued insurance contracts, this leads to providing more transparent information about the rights and obligations of the company; income and expenses are related to both contracts.	** 0.000	3.78	1.119	** 0.000	76%	6
There is no significant relationship between the application of IFRS 17 and compliance with the requirements of IFRS 4 for Jordanian insurance companies. In terms of presentation of the financial center list
12. The total assets and liabilities of the issued insurance contracts and reinsurance contracts are presented separately; this contributes to enhancing the relevance of the information contained in the financial reports.	** 00.00	3.74	1.177	** 0.000	75%	9
13. The rights and obligations arising from contracts are presented in net for each in one item, as if they were the assets or liabilities of a single insurance contract, this leads to an improvement in the quality of the financial report.	** 00.00	3.71	1.189	** 0.000	74%	11
Presented in terms of financial performance
14. The exclusion of investment components from insurance revenues in accordance with IFRS 17 Financial Reporting Standard does not inflate the volume of insurance revenues, this contributes to improving the level of transparency in financial reporting.	** 00.00	3.80	1.202	** 0.000	76%	4
15. The presentation of insurance financing income or expenses, by including in full with profits and losses or dividing between profits, losses and comprehensive income, a balance between comprehensibility and comparability is achieved.	** 00.00	3.85	1.176	** 0.000	77%	3
16. Disclosure of adjustments related to the change in the net book values of insurance contracts resulting from the movement of cash flows, income and expenses recognized in the financial performance list contributes to improving the quality of the financial report.	** 00.00	3.59	1.129	** 0.000	72%	17
17. Disclosure of details of the components regarding obligations of insurance contracts, as well as clarification of the amounts related to insurance services, improves the quality of the financial report, and provides appropriate information to users.	** 00.00	3.79	1.325	** 0.000	76%	5
18. Disclosure of contracts acquired during the processes of converting insurance contracts or grouping businesses independently of the issued insurance contracts contributes to providing clearer information to those who read financial reports.	** 00.00	3.54	1.132	** 0.000	71%	18
Recognized is value of the Kronbach Alpha coefficient for all elements that determine the impact of the application of IFRS 17 regarding development on the basis for recognition, measurement, improvement of presentation and disclosure of financial reports of insurance companies 0.975.

** Indicates the significance of the correlation coefficient at the significance level of 0.01.

).

Testing the main hypothesis by testing the sub-hypotheses; paragraph no.7 “discount rates are determined that reflect the characteristics of cash flows arising from insurance contracts and therefore the lack of options for determining these rates contributes to improving the quality of the financial report” relates to no.1 paragraph no.18 disclosure of contracts “acquired during the conversion of insurance contracts or grouping of business independently of the issued insurance contracts contributes to providing clearer information to users of financial reports” thus, no.18 is of relative importance to paragraphs testing the main hypothesis with testing its sub-hypotheses.

6.2. Testing the Main Hypothesis

Results of testing the main hypothesis and variables are as follows (

Table 6. The Results of the Correlation Relationship between the Main Hypothesis Variables.

Variable	Value	Coefficient (R²)	Correlation (R)
Jordanian insurance companies cannot apply IFRS 17 to the development of accounting measurement, disclosure and improving the quality of financial reports concerning compliance with the requirements of applying the IFRS 4 International Financial Reporting Standard for Jordanian insurance companies	** 0.000	0.961	0.980

** Indicates the significance of the correlation coefficient at the significance level of 0.01.

):

• Independent variable (X): application of IFRS 17 International Financial Reporting Standard.
• Dependent variable (Y): developing the basis for recognition, measurement, improving the presentation and disclosure of financial reports of insurance companies.
• A-correlation analysis

The table illustrates the following:

• The positive correlation indicates that there is a direct (positive) relationship between the application of IFRS 17 and the requirements for applying IFRS 4 for Jordanian insurance companies.
• The total correlation coefficient (0.980) indicates the strength of direct correlation between the application of IFRS 17, development on the basis for recognition and measurement, and the improvement of the presentation and disclosure of financial reports in light of compliance with the requirements of application IFRS 4 for Jordanian insurance companies.

Research concludes that there is a direct correlation between the application of IFRS 17 and development of the basis for recognition, measurement, improvement of presentation and disclosure of financial reports, regarding compliance with the requirements of IFRS 4 for Jordanian insurance companies; this supports the validity of the main hypothesis of the study.

6.2.1. B-Regression Analysis (Table 7)

(Y) A quantitative model of the simple regression between the variables of the main hypothesis can be formulated as follows: Y = Bo + B X

Developing the basis for recognition, measurement, improvement of presentation and disclosure of financial reports regarding compliance with the requirements of the application for International Financial Reporting Standard IFRS 4 for Jordanian insurance companies = 0.310 + 0.919 for the application of the International Financial Reporting Standard IFRS 17.

Table 7. Results of regression analysis of the main hypothesis variables.

Statement		Coefficient of Regression (B)
Fixed Amount (Bo)		0.310
(X) application of IFRS 17 International Financial Reporting Standard	independent variable	0.919

Table 7. Results of regression analysis of the main hypothesis variables.

Statement		Coefficient of Regression (B)
Fixed Amount (Bo)		0.310
(X) application of IFRS 17 International Financial Reporting Standard	independent variable	0.919

Research concludes from the results of the regression analysis of the main hypothesis that there is a strong relationship between the application of IFRS 17 and development of the basis for recognition, measurement, improvement of presentation and disclosure of financial reports regarding compliance with the requirements of IFRS 4 for Jordanian insurance companies; this supports the validity of the main alternative hypothesis of the study.

Testing the first sub-hypothesis:

Research reviews the results of testing the dependent hypotheses, and the variables of this hypothesis are as follows:

Independent variable (X): application of IFRS 17 International Financial Reporting Standard.

Dependent variable (Y): improving the quality of financial reporting of insurance companies.

6.2.2. A-Correlation Analysis (Table 8)

The table shows the following:

• The positive correlation indicates that there is a direct (positive) relationship between the application of IFRS 17 and the development of recognition, measurement, improved presentation, and disclosure of financial reports of Jordanian insurance companies.
• The total correlation value (0.951) indicates the strength of the direct correlation between the application of IFRS 17 (as an independent variable), improving the quality of financial reports of insurance companies, developing recognition and measurement, improving the presentation and disclosure of financial reports of Jordanian insurance companies (as a dependent variable).

Table 8. The results of the correlation relationship between dependent of the first sub-hypothesis variables.

Independent Variable	Value	Determination Coefficient (R²)	Correlation Coefficient (R)
There is no significant relationship between the application of IFRS 17 and the development of recognition, measurement, improved presentation, and disclosure for financial reports of Jordanian insurance companies.	** 0.000	0.903	0.951

** Indicates the relevance of the correlation coefficient at the significance level of 0.01.

Table 8. The results of the correlation relationship between dependent of the first sub-hypothesis variables.

Independent Variable	Value	Determination Coefficient (R²)	Correlation Coefficient (R)
There is no significant relationship between the application of IFRS 17 and the development of recognition, measurement, improved presentation, and disclosure for financial reports of Jordanian insurance companies.	** 0.000	0.903	0.951

** Indicates the relevance of the correlation coefficient at the significance level of 0.01.

The research concludes there is a strong direct correlation between the application of the IFRS 17 International Financial Reporting Standard and the development of recognition, measurement, improvement of presentation and disclosure for financial reports of Jordanian insurance companies; this supports the validity of the first sub-hypothesis of the study.

6.2.3. B-Regression Analysis (Table 9)

A quantitative model of the simple regression between the variables of the second hypothesis can be formulated as follows Y = Bo + B X.

Improving the presentation and disclosure of financial reports of Jordanian insurance companies = 0.128 + 0.966 applying the IFRS 17 International Financial Reporting Standard.

Table 9. Results of regression analysis of the variables of the first sub-hypothesis.

Statement	Regression Coefficient (B)
Constant magnitude (Bօ)	0.128
(X) application of IFRS 17 International Financial Reporting Standard (Independent Variable)	0.966

Table 9. Results of regression analysis of the variables of the first sub-hypothesis.

Statement	Regression Coefficient (B)
Constant magnitude (Bօ)	0.128
(X) application of IFRS 17 International Financial Reporting Standard (Independent Variable)	0.966

The research concluded from the results of the regression analysis of the second hypothesis that there is a strong impact relationship between the application of IFRS 17 and the improvement of the presentation and disclosure for financial reports of Jordanian insurance companies; this supports the validity of the first hypothesis.

Testing the second sub-hypothesis

Researched reviewed testing the dependent hypotheses, and the variables of this hypothesis are as follows:

• Independent variable (X): application of IFRS 17 International Financial Reporting Standard.
• Dependent variable (Y): improving the quality of financial reporting of insurance companies.

6.2.4. A-Correlation Analysis (Table 10)

• Positive correlation coefficients indicate a direct (positive) relationship between the application of IFRS 17 and the improvement in the quality of financial reporting of insurance companies.
• The total correlation coefficient (0.977) indicates the strength of the direct correlation relationship between the application of IFRS 17 (as an independent variable) and the improvement in the quality of financial reporting of insurance companies (as a dependent variable).

Table 10. The results of the correlation relationship between dependent hypothesis variables.

Independent Variables	Value	Determination Coefficient (R²)	Correlation Coefficient (R)
There is no statistically significant relationship between the implementation of IFRS 17 and the improvement of the quality of financial reports of Jordanian insurance companies.	** 0.000	0.954	0.977

** Indicates the significance of the correlation coefficient at the significance level of 0.01. The previous table shows.

Table 10. The results of the correlation relationship between dependent hypothesis variables.

Independent Variables	Value	Determination Coefficient (R²)	Correlation Coefficient (R)
There is no statistically significant relationship between the implementation of IFRS 17 and the improvement of the quality of financial reports of Jordanian insurance companies.	** 0.000	0.954	0.977

** Indicates the significance of the correlation coefficient at the significance level of 0.01. The previous table shows.

The research concludes that there is a strong direct correlation between the application of the IFRS 17 International Financial Reporting Standard and the improvement in the quality of financial reports of insurance companies; this supports the validity of the second hypothesis of the study.

6.2.5. B-Regression Analysis (Table 11)

A quantitative model of the simple regression between the variables of the second hypothesis may be formulated as follows: Y = Bo + B X.

Improving the quality of financial reports of insurance companies = 0.132 + 0.950 applying the IFRS International Financial Reporting Standard 17.

Table 11. Results of regression analysis of the second hypothesis variables.

Statement	(B) Coefficient of Regression
Constant magnitude (Bօ)	0.132
(X) application of the IFRS International Financial Reporting Standard 17 (Independent Variable)	0.950

Table 11. Results of regression analysis of the second hypothesis variables.

Statement	(B) Coefficient of Regression
Constant magnitude (Bօ)	0.132
(X) application of the IFRS International Financial Reporting Standard 17 (Independent Variable)	0.950

The research concludes from the results of the regression analysis of the second hypothesis that there is a strong impact relationship between the application of IFRS 17 and improving the quality of financial reports for insurance companies; this supports the validity of the second hypothesis of the study.

6.3. Testing the Third Sub-Hypothesis

The research reviews the results of testing the dependent hypotheses and the variables of this hypothesis as follows:

• Independent variable (X): application of IFRS 17 International Financial Reporting Standard.
• Dependent variable (Y): improving the quality of financial reporting of insurance companies.

6.3.1. A-Correlation Analysis (Table 12)

The table shows the following results:

• A positive correlation indicates that there is a direct (positive) relationship between the application of IFRS 17 and compliance with the requirements for the application of IFRS 4 for Jordanian insurance companies.
• The total correlation coefficient value (0.970) indicates the strength of the positive correlation relationship between the application of IFRS 17 (as an independent variable) and compliance with the requirements of the application of IFRS 4 for Jordanian insurance companies (as a dependent variable).

Table 12. The results of the correlation relationship between dependent of the third sub-hypothesis variables.

Independent Variable	Value	Determination Coefficient (R²)	Correlation Coefficient (R)
There is no significant relationship between the application of IFRS 17 and compliance with the requirements of IFRS 4 for Jordanian insurance companies	** 0.000	0.949	0.970

** Indicates the relevance of the correlation coefficient at the significance level of 0.01.

Table 12. The results of the correlation relationship between dependent of the third sub-hypothesis variables.

Independent Variable	Value	Determination Coefficient (R²)	Correlation Coefficient (R)
There is no significant relationship between the application of IFRS 17 and compliance with the requirements of IFRS 4 for Jordanian insurance companies	** 0.000	0.949	0.970

** Indicates the relevance of the correlation coefficient at the significance level of 0.01.

Research concludes there is a strong direct correlation between the application of IFRS 17 and compliance with the requirements of IFRS 4 for Jordanian insurance companies; this supports the validity of the third sub-hypothesis of the study.

6.3.2. B-Regression Analysis (Table 13)

A quantitative model of the simple regression between the variables of the second hypothesis can be formulated as follows: Y = Bo + B X.

Compliance with the requirements of applying the IFRS 4 International Financial Reporting Standard for Jordanian insurance companies = 0.285 + 0.910 when applying the IFRS International Financial Reporting Standard 17.

Table 13. Results of regression analysis of the third hypothesis variables.

Statement	Regression Coefficient (B)
Constant magnitude (BO)	0.285
(X) application of the IFRS International Financial Reporting Standard 17 (Independent Variable)	0.910

Table 13. Results of regression analysis of the third hypothesis variables.

Statement	Regression Coefficient (B)
Constant magnitude (BO)	0.285
(X) application of the IFRS International Financial Reporting Standard 17 (Independent Variable)	0.910

The research concludes from the results of the regression analysis of the third hypothesis that there is a strong impact relationship between the application of IFRS 17 and compliance with the requirements of the application of IFRS 4 for Jordanian insurance companies; this supports the validity of the third sub-hypothesis of the study.

7. Results and Recommendations

Study Results

• IFRS 17 can be applied to the development of accounting measurement, disclosure and improve the quality of financial reports regarding compliance with the requirements of applying the IFRS 4 International Financial Reporting Standard for Jordanian insurance companies; this supports the validity of the alternative hypothesis of the study.
• There is a significant statistical relationship between the application of IFRS 17 and the development of recognition, measurement, improved presentation, and disclosure of financial reports of Jordanian insurance companies; this supports the validity of the first alternative sub-hypothesis of the study.
• There is a statistically significant relationship between the application of IFRS 17 and the improvement of the quality of financial reports of Jordanian insurance companies; this supports the validity of the second alternative sub-hypothesis of the study.
• There is a significant statistical relationship between the application of IFRS 17 and compliance with the requirements of IFRS 4 for Jordanian insurance companies; this supports the validity of the third alternative sub-hypothesis of the study.
• The International Accounting Standards Board IASB issued the international standard for financial reporting IFRS4 which became enforceable from January 2005; due to the strong criticism of the standard, it was considered an interim step until the issuance of a comprehensive accounting standard for insurance contracts.
• The International Accounting Standards Board (IASB) drafted and issued the IFRS 17 International Financial Reporting Standard in order to improve the quality of financial reports issued by insurance companies. In this regard, it was necessary to develop the recognition, measurement, presentation, and disclosure bases contained in IFRS 4 International Financial Reporting Standard.
• Insurance risks represent the essence of the insurance contract. If the contract transfers to the insurance company only financial risks without insurance risks, then it is not an insurance contract, taking into account that some insurance contracts do not transfer any insurance risks to the company at the beginning, but they transfer them later, on the basis of present value using discount rates, this did not exist as an obligation of IFRS 4.
• The application of IFRS 17 requires the separation of the components of the contract into three non-insurance components according to their characteristics and conditions, to be separately accounted for, which affects improving the quality of financial reports and providing more relevant information to users of these reports on the cash flows associated with these components and the company’s operational performance.
• IFRS 17 requires that the total assets and liabilities of issued insurance contracts and reinsurance contracts held separately be presented in the balance sheet in order to enhance transparency and improve the quality of information contained in financial reports.
• The disclosure requirements of IFRS 17 aim to provide appropriate information in financial reports and supplemental clarifications to improve the transparency and quality of the information presented in these reports, enabling users to assess the impact of contracts falling within the scope of the standard on the financial position, financial performance, and cash flows of the company.

In conclusion, IFRS 17 is a comprehensive accounting standard that provides guidance for the recognition, measurement, presentation, and disclosure of insurance contracts. Moreover, can be applied to the development of accounting measurement, disclosure, and improve the quality of financial reports regarding compliance with the requirements of applying the IFRS 4 International Financial Reporting Standard for Jordanian insurance companies The standard aims to improve the comparability and transparency of financial reporting in the insurance industry and to provide more relevant and reliable information to stakeholders.

By establishing a single model for accounting for insurance contracts, IFRS 17 enhances the comparability of financial statements and provides a clearer picture of the financial position and performance of insurance companies. The standard also requires more detailed disclosures about the risks associated with the insurance contracts, which helps to improve the quality of financial reporting.

8. Recommendations

Based on the benefits and challenges of implementing IFRS 17, here are some recommendations for insurance companies:

• Planning and Preparation: Insurance companies should start planning and preparing for the implementation of IFRS 17 well in advance to ensure a smooth transition. This includes assessing the impact of the new standard on their business processes, systems, and data, and developing a comprehensive implementation plan.
• Data Management: Insurance companies should ensure that they have accurate, complete, and reliable data to support the implementation of IFRS 17. They should also establish processes and controls to manage the data effectively.
• IT Systems: Insurance companies should consider the need for new or upgraded IT systems to support the implementation of IFRS 17. This may include changes to accounting and reporting systems, data management tools, and actuarial models.
• Training and Communication: Insurance companies should provide training and communication to their employees, investors, and other stakeholders on the new requirements of IFRS 17. This will help to ensure that everyone understands the changes and their impact.
• Ongoing Monitoring and Review: Insurance companies should establish processes to monitor and review the effectiveness of the implementation of IFRS 17. This includes regular assessments of the quality of financial reporting, compliance with regulatory requirements, and the effectiveness of internal controls.
• There is a need to conduct more research and studies related to the impact of adopting the IFRS 17 International Financial Reporting Standard in improving the quality of financial reports and addressing obstacles to its application. Research and studies can help to provide insights into the potential benefits and challenges of adopting IFRS 17. Items to be addressed include current laws, professional qualification of financial report preparers in insurance companies, as well as auditors and the increasing needs for information required by existing and prospective investors.
• There is a need to include the International Financial Reporting Standard IFRS 4 and IFRS 17 in the content of the accounting course, in order to link academic study with practice to keep abreast of developments in the international business environment, supplying the labor market with distinguished graduates.
• There is a need for major accounting and audit offices (KPMG, EY, PWC, Deloitte) to issue more guidelines for the application of IFRS 17 in order to be a guide and reference for those who prepare financial report in insurance companies and for auditors.
• There is a need to increase attention to disclosure, improvement, and accounting development in relation to IFRS 17 to provide appropriate information in financial reports and clarifications to improve the transparency and quality of the information presented in these reports, thus, enabling users to assess the impact of contracts falling within the scope of the standard on the financial position, financial performance, and cash flows of the company.