Are investment contracts with discretionary participation features measured under VFA or GMM? Assuming that they meet the three VFA eligibility tests. It is not clear to me whether all contracts that meet the VFA eligibility criteria - both insurance and investment contracts within scope, are measured under VFA or whether only insurance contracts with direct participation features are measured under VFA, and investment contracts with discretionary participation features then measured under GMM.
General rule of thumb: if the cashflows depend on the value of a defined pool of assets then they are measured under the VFA approach. Investment contracts with no insurance element are measured under IFRS 9 but if there is an insurance element then an investment- like contract would likely be measured under the VFA approach. The GMM model is normally used for your non-profit products as the cashflows are independent of the assets.
