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IFRIC 21, Levies [Completed]

Effective date: Annual periods beginning on or after January 1, 2014.

Transitional provisions:

Effective for annual periods beginning on or after January 1, 2014.

Last updated:

August 2014


IFRIC was asked to consider how an entity should account for liabilities to pay levies imposed by governments, other than income taxes, in its financial statements.  The principal question raised was about when the entity should recognize a liability to pay a levy. IFRIC 21 is an interpretation of IAS 37 Provisions, Contingent Liabilities and Contingent Assets.  IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (known as an obligating event).  The Interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy.  The Interpretation includes guidance illustrating how the Interpretation should be applied.

Recent activities

August 2014

In August 2014, CPA Canada issued two documents: (i) Identifying Levies in the Mining Industry; and (ii) Identifying Levies in the Oil & Gas Industry which discuss the type of payments made by these two industries that may fall within the scope of IFRIC 21. The documents also provide an overview of IFRIC 21 and consider the implications for these two industries.

March 2014

On March 12, 2014, the AcSB issued a Summary of its IFRS Discussion Group’s public meeting on February 26, 2014 relating to the implementation of IFRIC 21 in Canada.  The Summary discusses both (i) property taxes; and (ii) levies other than property taxes.

January 2014

On January 31, 2014, the AcSB issued a Summary of its IFRS Discussion Group’s meeting on December 2, 2013 relating to the implementation of IFRIC 21 in Canada. Noting that that the scope of IFRIC 21 is potentially quite broad and that careful consideration of all types of payments imposed by governments is necessary, the Discussion Group encourages preparers and auditors to focus on IFRIC 21 and to spend the necessary time to analyze the various payments made to government under this Interpretation.

May 2013

On May 20, 2013, the IASB issued IFRIC 21: Levies, an Interpretation on the accounting for levies imposed by governments. 

May 2012

On May 31, 2012, the IFRIC published for public comment proposed guidance on the accounting for levies charged by public authorities on entities that operate in a specific market. On July 10, 2012, the AcSB issued a draft Interpretation that corresponds to the IFRIC’s draft Interpretation.

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