The European Union's endorsement of Amendments to International Financial Reporting Standard 4: An unprecedented “top up”

The International Financial Reporting Standards (IFRS) must pass a formal endorsement process to become binding for companies based in the European Union (EU). In an unparalleled instance, the EU recently endorsed “Amendments to IFRS 4” with a modification labeled as “top up” by allowing European financial conglomerates to defer the application of IFRS 9 “Financial Instruments” in their insurance sectors. This paper explains the background of this decision, identifies the “top up” as an unprecedented case of carve-in, and discusses the key implications for regulation and practice.