Paragraph 12 of ias 38 states that an asset is identifiable if it is. Ifric 12, service concession arrangements and related. The idea of iasb was to provide guidelines for booking assets in ppp. As at 1 january 2016 ifric 4 determining whether an arrangement contains a lease effective date periods beginning on or after 1 january 2006 specific quantitative disclosure requirements.
More detailed guidance and information on these topics can be found on inform. Sep 14, 2015 presentation by ca varun sethi the presentation discusses the accounting framework for accounting by grantors and operators. The application guidance in ifric 23 highlights the existing disclosure requirements of ias 1 presentation of financial statements and ias 12 to consider whether to disclose the judgements and provide information about assumptions and estimates made when there is uncertainty over income tax treatments. Ias 12 describes how organisations should account for current and deferred tax, but the standard does not address how the effects of uncertainty should be reflected. Paragraphs bb20 of ifrs 16 provide application guidance on an identified asset. Ifrs 15 software contract modifications it is common in the software industry to change the scope or price of the contract. This includes schemes as diverse as those offered by supermarkets, airlines, telecommunications operators, hotels and credit. Ifric update is a summary of the decisions reached by the ifrs interpretations committee committee in its public meetings the committee met in london on 56 march 2019, and discussed. This is what this is about ifric 12 service concessions accounting. We believe recent guidance on the application of aasb 10ifrs 10. There is no definition in ifric 12 but a characteristic included is as follows. The evennumbered pages contain explanatory comments and notes on the disclosure requirements of ifrs. Jun 22, 2017 ias 12 describes how organisations should account for current and deferred tax, but the standard does not address how the effects of uncertainty should be reflected. Costs to fulfil a contract ifrs 15 revenue from contracts with customersagenda.
Determining whether an arrangement contains a lease. Ifric 12 service concession arrangements springerlink. Full year results announcement, change in terminology following issue of esma guidelines. In italy, these arrangements are referred to as public service concession agreements, which is the procedure through which the authority, or the administration the grantor entrusts an individual. Until now, public sector entities have had no international guidance. Ifric update is a summary of the decisions reached by the ifrs interpretations committee committee in its public meetings the committee met in london on 56 march 2019, and discussed committees tentative agenda decisions. Hence, development costs associated with internallydeveloped software can be capitalized under ias 38 if the criteria for capitalization are met. Ifric 12, which gives guidance on the accounting by operators in service concession arrangements. Asc 853 service concession arrangements this topic provides guidance for reporting entities when they enter into a service concession arrangement with a public sector grantor who controls or has the ability to modify or approve the services that the operating entity must provide with the infrastructure, to whom it must provide them, and at. Ifric interpretation 4 determining whether an arrangement contains a lease references ias 8 accounting policies, changes in accounting estimates and errors ias 16 property, plant and equipment as revised in 2003 ias 17 leases as revised in 2003 ias 38 intangible assets as revised in 2004 ifric 12 service concession. The grantor controls or regulates what services the operator must provide with the infrastructure, to whom it must provide them, and at what price. This guide is intended to serve as an illustrative tool for the reader in the application of ifric 12 service concession arrangements, providing analysis of the requirements of ifric 12 and practical guidance with examples that address some of the more complex issues around service concession arrangements. The illustrative financial statements are contained on the oddnumbered pages of this publication. Synopsis including link to unaccompanied version of ifric 12.
Ifric interpretations require ratification by the international accounting standards board board. Contract an agreement between two or more parties that creates enforceable rights and obligations. Accordingly, the scope, principle for recognition of an asset, and terminology are derived from ifric 12. Guidance software, now opentext, is the maker of encase, the gold standard in forensic security. Capitalization of internally developed software ifrs and us. Service concession arrangements interpretation 12 and ipsas 32, should. Ifrs 15 revenue from contracts with customers 2 defined terms ifrs 15 defines the following terms that form an integral part of this ifrs.
With this guidance in mind, we now turn to look at the agenda. Ifric 12 gives guidance on the accounting by operators for publictoprivate service concession arrangements ifric 12 applies to publictoprivate service concession arrangements if both. Ifric 12 identified two types of service concession arrangements. Under the guidance of an external advisor, adopting environmentallyfriendly practices. Ifric 12 service concession arrangements a pocket practical guide. Ifric 12 describes the accounting treatment of concession contract arrangements. When does the interpretation ias 12, not ias 37 provisions, contingent liabilities and contingent assets, applies to accounting for uncertain income tax treatments. One in which the operator has a contractual right to receive cash or another financial asset from the government. Ifric 12 before evaluating whether an arrangement contains a lease. Ifric 12 and its accompanying documents have been amended by the following ifrss.
Hkifricint 12 is accompanied by information notes, illustrative examples and a basis for conclusions. For a discussion of the key considerations for technology entities that do not currently apply software guidance, refer to our applying ifrs, the new revenue recognition standard technology january 2015 technology. Fulfilment is dependent on the use of a specific asset although a specific asset may be explicitly. Ifric 4 determining whether an arrangement contains a lease. In summary, the key test is whether it is more likely than not that the taxing authority having full knowledge will accept the. Applying ifrs a closer look at ifrs 16 leases december 2018. Customer a party that has contracted with an entity to obtain goods or services that are an output of the. Decisions on an ifric interpretation become final only after the committee has taken a formal vote.
Ifric 12, service concession arrangements and related accounting policies ifric 12, service concession arrangements disclosures ifric 12, concessions, policy and disclosures and effect of ifric july 2016 clarification. Whether the arrangement specifies the maintenance program with respect to the property. Iasb issues ifric 23 uncertainty over income tax treatments. The application guidance would focus more generally on changes in facts and circumstances, and include examples of what might constitute such a change. The guide is intended to serve as an illustrative tool for the reader in the application of ifric 12 service concession arrangements, providing analysis of the requirements of ifric 12 and practical guidance with examples that address some of the more complex issues around service concession arrangements. Presentation by ca varun sethi the presentation discusses the accounting framework for accounting by grantors and operators. International financial reporting interpretations committee. Service concession arrangements service concession. While this requirement is the same as under existing us gaap, the impact of not applying this requirement is more significant because most leases must be recognized on the balance sheet under the new guidance.
Ppp contracts, concession contracts and other infrastructure accounting policies under the terms of ifric 12 service concession arrangements, a concession operator may have two types of activities. In transitioning to ifric 12, accounting for assets, liabilities and. Ifric 12, policy and significant judgements and estimates. The interpretation does not provide any further guidance on assessing whether it. Leases and ifric discussions 1 introduction this accounting update covers technical ifrs. Ifric 23, uncertainty over income tax treatments, adds to the requirements in ias 12 by specifying how the effects of uncertainty in accounting for income taxes should be reflected. Guidance are set out in the appendix of the interpretations that created. Customers right to receive access to the suppliers software hosted on the cloud ifrs 16 leases. For example, a vendor may license software and provide postcontract customer support pcs to a customer in an initial transaction and then license additional software to the same customer at a later time. Change to definition of apm following sec guidance.
An outline of the objectives of current or planned ppp programs and a summary. Ifrs does not currently include specific guidance on income tax exposures. If an arrangement contains a lease, the parties to the arrangement apply the requirements of ias 17 to the lease element of the arrangement, unless exempted from those requirements in. Ifric update is a summary of the decisions reached by the ifrs interpretations committee committee in its public meetings.
Ifric update is a summary of the decisions reached by the ifrs interpretations committee committee in its public meetings decisions on an ifric interpretation become final only after the committee has taken a formal vote. Ifric 2 pricewaterhousecoopers scope ifric applies to all entities that grant award credits as part of a sales transaction, including awards that can be redeemed for goods and services not supplied by the entity. Iasb issues ifric 23 uncertainty over income tax treatments 2 in determining whether the tax authority will accept the entitys tax treatment, and if. The guidance below describes a number of areas where. Guidance software provides deep 360degree visibility across all endpoints, devices and networks with fieldtested and courtproven software. Accounting for publicprivate partnerships by veronica r. The ifrs foundation provides free access through basic registration to the pdf files of the current years ifric interpretations part a of the issued standardsthe red book, as well as available translations of interpretations this section also provides high level and nontechnical summaries for the interpretations. Ifric 12 describes the accounting treatment of concession contract. All conclusions reported are tentative and may be changed or modified at future interpretations committee meetings. Ifric 12 clarifies how certain aspects of existing ifrs should be applied by an.
The guide provides guidance on scope, the determination of the accounting model, specific characteristics of. Ias 12 income taxesaccounting for income tax consequences of interest payments on, and issuing costs of, financial instruments that are classified as equity agenda paper 8 ifric 12 service concession arrangementspayments by an operator to a grantor in a service concession arrangement in the scope of ifric 12 agenda paper 2c. Ias 21 the effects of changes in foreign exchange rates foreign currency transactions and. Ifric interpretation 12 provides guidance on the accounting methods to be adopted by operators of infrastructure to deliver public services, or services operated as a concession. Hkifric the hong kong institute of certified public accountants. Some companies may not need to look to guidance beyond whats available in ias 38 to determine whether these criteria are met and there is no requirement to do so. Gaap does not contain specific guidance for the accounting for service concession arrangements. The committee noted that a customer receives a software asset at the. Ifric 12 service concession arrangements was developed by the international financial reporting interpretations committee and issued by the international accounting standards board in november 2006. Are, or contain, leases excluded from the scope of ias 17 are publictoprivate service concession arrangements within the scope of ifric 12service concession arrangements. Ifric 23 2 will reduce diversity in practice, but may create new differences between ifrs and us gaap. Accounting update 201609 2 ifric discussions and decisions the interpretations committee met in london on 12 july 2016 to discuss the following issues. The new standard also requires organizations to identify the lease and nonlease components of any contract containing a lease. Because of this focus on the operator alone in ifric 12, the ipsasb initiated its own.
Ifric 12 service concession arrangements 1 ifric 12 service concession arrangements audit kpmg somekh chaikin ifric 12 service concession arrangements 2 introductionintroduction ifric 12 issued 30 november 2006 response to diversity in practice calls for guidance ifric 12 focuses on buildoperatetransfer type arrangements. Ifric 12 gives guidance on the accounting by operators for publictoprivate s ervice concession arrangements ifric 12 applies to publictoprivate service concession arrangements if both. One in which the operator has the right to charge for access to the service that it supplies. It provides specific guidance to operators regarding accounting for public to. Accounting for service concession arrangements pwc australia.
All conclusions reported are tentative and may be changed or modified at. Taxation ias 12, ifric 23 27 earnings per share ias 33 28. Applying ifrs a closer look at ifrs 16 leases december. Capitalization of internally developed software ifrs and. Paragraphs b9b31 set out guidance on the assessment of whether a contract is, or contains, a lease. Ipsas 32 is not a convergence project because ifric 12 applies.
Hkifric int 12 service concession arrangements background 1 an entity may enter into an arrangement, comprising a transaction or a series of related transactions, that does not take the legal form of a lease but conveys a right to use an asset eg. This guide outlines the differences between ifrs and cas. Ipsasb approves ipsas 32service concession arrangements. Ca varun sethi ifrs trainings ifric 12 accounting for. Implementation of ifric 23 pose challenges accounting weekly. Licences of intellectual property granted by a lessor within the scope of ifrs 15. Taxation ias 12, ifric 23 27 earnings per share ias 33 28 balance sheet and related notes 29 intangible assets ias 38 30 property, plant and equipment ias 16 31. Ifric 12, concessions, policy and disclosures and effect of ifric july 2016 clarification ifric 12, policy and significant judgements and estimates for service concessions, intangibles, disclosures sic 29, details of service concession arrangements. Guidance basis for conclusions appendix amendments resulting from other basis for conclusions hong kong ifric interpretation 12 service concession arrangements hkifricint 12 is set out in paragraphs and appendices a, b and c. After paragraph 25g, a new heading and paragraph 25h are inserted as follows. In italy, these arrangements are referred to as public service concession agreements, which is the procedure through which the authority, or the administration the.
Ifric interpretation 12 service concession arrangements ifric 12 is set out in paragraphs and appendices a and b. Sep 20, 2012 hence, development costs associated with internallydeveloped software can be capitalized under ias 38 if the criteria for capitalization are met. Costs to fulfil a contract ifrs 15 revenue from contracts with customersagenda paper 2. Ifric 12, policy and significant judgements and estimates for. Accounting and financial reporting for service concession. Ifric update from the ifrs interpretations committee march 20 welcome to the ifric update ifric update is the newsletter of the ifrs interpretations committee the interpretations committee. Ifrs ic issued ifric 23, which clarifies how the recognition and measurement requirements of ias 12 income taxes, are income tax treatments. The ipsasbs improvements project is modeled on the iasbs annual update program. Iasb issues ifric 23 uncertainty over income tax treatments 1 issues a question has arisen in practice as to how uncertainty about the acceptability by a tax authority of a particular tax treatment used by an entity in its income tax filings uncertain tax treatment should be reflected in the financial statements. Management used philippine interpretation ifric 12 as guide and determined that the concession agreement is within the scope of the interpretation since it. In fact, no specific ifrs recognition and measurement guidance previously existed for these types of arrangement. Covered in detail is the ifric 12 accounting by operators concessionaires for service concession arrangements sca. Ifrs news q2 2019 grant thornton international ltd. Major changes from the september 2011 edition of illustrative financial statements.
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