3.1.4 Forming the Cohorts

IFRS 17 requirements mandate that contracts issued more than one year apart should not be included in the same group. To achieve this, groups can be further divided as required. Each of these groups can include contracts issued over any length of time up to one year. This period does not need to be restricted or aligned with the reporting period of the entity. This requirement is known as the Annual Cohort Requirement.

The contracts in the cohorts can be of less than one year as well. For example, if an entity manages contracts in quarterly cohorts it could choose to have groups issued within a reporting quarter.