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We comment on three IFRIC tentative agenda decisions

  • Deloitte document (mid gray) Image

22 Jul 2016

We have published our comment letters to the IFRS Interpretations Committee on tentative agenda decisions not to take onto the Committee’s agenda (1) service concession arrangements for which the infrastructure is leased (IFRIC 12), (2) fees and costs included in the '10 per cent' test for the purposes of derecognition (IAS 39), and (3) written puts over non-controlling interests to be settled by a variable number of the parent’s shares (IAS 32).

We agree with the IFRS Interpretations Committee's decision not to add a request for clarification of how an operator accounts for a service concession arrangement not including any construction or upgrade services for which the infrastructure is leased onto its agenda for the reasons set out in the tentative agenda decision. Please click to access the full comment letter.

We do agree with the IFRS Interpretations Committee's decision not to add the issue of which fees and costs should be included in the ‘10 per cent’ test for the purposes of derecognition of a financial liability onto its agenda, however, we believe a more significant clarification of the standard is warranted as well as, since there is currently significant diversity, explicit transition provisions. Please click to access the full comment letter.

We do not agree with the IFRS Interpretations Committee's decision not to add the request for guidance on written puts over non-controlling interests that will, or may, be settled by the exchange of a variable number of the parent’s own equity instruments onto its agenda because it will (1) promote structuring and increase diversity in practice over what is likely to be a significant period of time before the FICE project is completed and (2) general comments on NCI puts in the tentative agenda decision could give rise to ‘contamination’ and bring uncertainty and diversity into what is now a largely consistent practice around more traditional, cash-settled, NCI put arrangements. Please click to access the full comment letter.

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