IFRS Interpretations Committee publishes proposed guidance on levies and put options

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31 May, 2012

Today, the IFRS Interpretations Committee published for public comment proposed guidance on accounting for (1) levies charged by public authorities on entities that operate in a specific market and (2) a put option written by a parent entity on the shares of its subsidiary held by a non-controlling-interest shareholder.


The Committee considered how an entity would account for the payment of levies, other than income taxes, in its financial statements; specifically, when the liability to pay a levy should be recognised. The proposed guidance, DI/2012/1 Levies Charged by Public Authorities on Entities that Operate in a Specific Market, clarifies that "the obligating event that gives rise to a liability to pay a levy is the activity that triggers the payment of the levy as identified by the legislation".

Comments on the levies proposal are due by 5 September 2012.

Click for DI/2012/1 and the press release, both available on the IASB website.


Put options

The Committee considered how to measure the financial liability created when a parent entity is obliged to purchase the shares of its subsidiary for cash or for another financial asset, and the parent must recognise a financial liability in its consolidated financial statements for the present value of the option exercise price.

The proposed guidance, DI/2012/2 Put Options Written on Non-controlling Interests, clarifies that all changes in the measurement of that financial liability should be recognised in profit or loss in accordance with IAS 39 Financial Instruments: Recognition and Measurement and IFRS 9 Financial Instruments.

Comments on the put options proposal are due by 1 October 2012.

Click for DI/2012/2 and the press release, both available on the IASB website. A french translation of DI/2012/2 is also available.

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