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IFRIC 12 — Payments made by an operator to a grantor in a service concession arrangement

Date recorded:

Background

A request was received relating to the accounting for variable contractual payments made by an operator under a service concession agreement within the scope of IFRIC 12.

The issue was discussed in numerous Committee meetings and they noted that the variability of these payments was part of the broader issue of accounting for variable payments for asset purchases. In their November 2015 meeting, the Committee decided that developing accounting for variable payments for asset purchases was too broad an issue for it to address and issued a related tentative agenda decision.

The Committee then considered whether a solution could be reached relating to the accounting for payments made by an operator to a grantor without addressing the variable payments for asset purchases issue. They decided that this issue, too, was too broad and requested the staff to prepare a tentative agenda decision.

Staff recommendation

The staff have drafted a tentative agenda decision and recommend that this be approved by the Committee.

Committee discussion and decision

A few members raised concerns regarding the wording of the tentative agenda decision, in particular the paragraph discussing the link to the accounting for variable payments for asset purchases and whether sufficient explanation had been provided for the conclusions reached.

Despite this, there was general support for the Agenda Decision. The Chair, based on the concerns raised about the wording provided, requested assistance to be provided to the Staff by some Committee members in order to address the drafting concerns raised.

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