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IAS 37/IFRIC 6 — Levies charged for participation in a market on a specified date

Background

An IFRS Interpretations Committee project to determine whether, under certain circumstances, IFRIC 6 Liabilities Arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment should be applied to other levies charged for participation in a market on a specified date to identify the event that gives rise to a liability.

Concern relates to when a liability should be recognised and to the definition of a present obligation in IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

The specific examples provided to the Committee include the United Kingdom bank levy, fees paid to the Federal Government by pharmaceutical manufacturers in the US, bank levy in Hungary, and the railway tax in France.  The IFRS Interpretations Committee is expected to assess whether current guidance is sufficient to help preparers of financial statements and others to apply IFRSs to a range of facts and circumstances, rather than to provide answers to each of the specific situations presented to them.

 

Current status of the project

The Committee released Draft Interpretation DI/2012/1 Levies Charged by Public Authorities on Entities that Operate in a Specific Market on 31 May 2012.  A finalised Interpretation is expected in the second quarter of 2013.

 

Project milestones

DateDevelopmentComments
31 May 2012 Draft Interpretation DI/2012/1 Levies Charged by Public Authorities on Entities that Operate in a Specific Market released Comment deadline 5 September 2012

Related Discussions

  • IFRS Interpretation on Levies

  • Apr 25, 2013

  • The Board discussed and ratified the Interpretation Committees draft interpretation on the accounting for levies.

  • IAS 37 & IFRIC 6 — IFRS Interpretation - Levies

  • Jan 23, 2013

  • The IFRS Interpretations Committee continued redeliberations on its proposed Interpretation on accounting for levies charged by a public authority on entities that participate in a specific market.

  • Levies — Education session (IASB only)

  • Nov 19, 2012

  • The Board discussed the report by the IFRS Interpretation Committee regarding the comments received on the draft interpretation on accounting for levies.

  • IAS 37 and IFRIC 6 — Levies charged for participation in a specific market

  • May 15, 2012

  • The IFRS Interpretations Committee considered a ballot draft interpretation presented by the staff. The Interpretation addresses the accounting for levies other than income taxes that are within the scope of IAS 12 'Income Taxes', fines or other penalties imposed for breaches of legislation and contracts between a public authority and a private entity. The most significant changes to the draft interpretation since that provided by the staff during the Committee’s March 2012 meeting were the inclusion of core characteristics of levies within the scoping section of the draft interpretation and the addition of a Basis for Conclusions paragraph further describing that economic compulsion to continue operating in a future period does not create a constructive obligation to pay a levy.

  • IAS 37/IFRIC 6 – Levies charged for participation in a market on a specified date

  • Nov 03, 2011

  • Following previous meeting decisions to add the issue of whether the obligating event is the participation in an activity on the date specified by the legislation, or whether other factors create an earlier obligation, to its agenda, the focus of November 2011 deliberations was to consider when the liability for the obligation to pay a levy should be recognised.

  • IAS 37/IFRIC 6 – Levies charged for participation in a market on a specified date (new)

  • May 06, 2011

  • The IFRS Interpretations Committee received a request for clarification about whether IFRIC 6 'Liabilities arising from Participating in a Specific Market — Waste Electrical and Electronic Equipment' should be applied by analogy to other levies charged for participation in a market on a specified date to identify the event that gives rise to a liability.

All Related