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IAS 37 and IFRIC 6 — Waste Electrical and Electronic Equipment

Date recorded:

In May 2012, the Committee published a draft Interpretation on the accounting for levies charged by public authorities on entities that participate in a specific market. Respondents requested that the final Interpretation address the accounting for levies that are due if a minimum revenue threshold is achieved. Those levies were not included within the scope of the draft Interpretation because the Committee could not reach a consensus on the accounting for those levies.

The Committee originally redeliberated this issue, along with several other issues, in November 2012 and January 2013.

As a result of earlier redeliberations, the staff presented a revised draft of the Interpretation for its review. The staff also asked the Committee whether the revised draft of the Interpretation required re-exposure, and if not, whether the revised draft could be submitted to the IASB for approval with a suggested effective date of 1 January 2014.

Several Committee members found the language included in the Interpretation on the interim accounting for the liabilities confusing, but the staff and some Committee members also expressed that such wording is needed and currently is and should be in line with IAS 34 Interim Financial Reporting.

It was agreed, that the text included in BC7 of the proposed Interpretation stating that the existence of a contractual relationship was not enough to meet the definition of a levy should be moved to the actual text of the Interpretation.

One Committee member asked whether the Interpretation was expected to impact purchase contracts with volume rebates. The staff noted the proposed Interpretation focused on non-contractual arrangements in IAS 37. Volume rebates were noted as a cost of inventory under IAS 2 which should not be impacted by the Interpretation.

When requested to express support and dissenting views on the publication of the Interpretation, the majority of the Committee members supported the publication. One Committee member expressed his intention to dissent and one member stated she would abstain to the draft Interpretation on the basis of perceived usefulness given the current scope. The dissenting view will be included in the staff papers provided to the IASB. The staff will proceed to finalise the Interpretation for IASB approval.

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