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The Interpretations Committee will discuss wording for a tentative agenda decision at a future meeting

 11 November 2015


The Interpretations Committee received a request to clarify the accounting for contractual payments that are to be made by an operator to a grantor under a service concession arrangement within the scope of IFRIC 12 Service Concession Arrangements.

The Interpretations Committee had noted in previous meetings that when the payments to be made by the operator are variable and the intangible asset model in IFRIC 12 is applicable to the arrangement, the issue is linked to the broader issue of variable payments for asset purchases.

The Interpretations Committee noted that it had reached a conclusion at this meeting that the accounting for variable payments for asset purchases was too broad an issue for the Interpretations Committee to address (see Tentative Agenda Decision - IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets—Variable payments for asset purchases (Agenda Papers 2–2B).

Consequently, the Interpretations Committee considered whether a solution could be developed to address the accounting for payments made by an operator to a grantor without the need to address the broader issue of variable payments for asset purchases. However, members of the Interpretations Committee expressed mixed views on this approach. Some members were of the view that the issue could not be addressed without addressing the broader issue of accounting for variable payments for asset purchases. Other members were of the view that service concession arrangements represent a unique type of arrangement that shares some characteristics with lease contracts. These members were of the view that the Interpretations Committee could consider developing guidance by utilising principles similar to those developed by the IASB for the accounting for variable payments in lease contracts.

However, on balance the Interpretations Committee concluded that the issue was also too broad for it to address and directed the staff to prepare a tentative agenda decision for consideration at a future meeting.

Next steps

The Interpretations Committee will discuss the proposed wording for a tentative agenda decision at a future meeting.


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