The IFRIC was asked to provide guidance on how an entity should measure distributions of assets other than cash when it pays dividends to its owners acting in their capacity as owners. At present, International Financial Reporting Standards do not address the measurement of distributions to owners.
IFRIC D23 would apply to all types of distributions of non-cash assets with one exception. It would not apply to a distribution of an asset to another entity within the same consolidated group.
IFRIC D23 proposes that all types of distributions of non-cash assets would be measured at the fair value of the assets distributed. Therefore:
- When an entity incurs an obligation to distribute non-cash assets to its owners (a dividend payable), it should measure the obligation at the fair value of the non-cash assets.
- When an entity settles the dividend payable, it should recognise any difference between the carrying amount of the assets distributed and the carrying amount of the dividend payable in profit or loss.
The Interpretation, if finalised, would apply prospectively, that is, to future distributions.
Comment deadline is 25 April 2008. Click for Press Release (PDF 44k).
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