Deloitte comment letter on tentative agenda decision on IFRIC 21 — Levies raised on production property, plant and equipment
We have commented on the IFRS Interpretations Committee tentative decision not to take onto the Committee’s agenda a request for guidance on whether the cost of a levy raised on production property, plant and equipment is an administrative cost to be recognised as an expense when incurred or a fixed production overhead to be recognised as part of the cost of inventory.
We agree with the IFRS Interpretations Committee’s analysis of IFRIC 21, however, we suggest the wording on ‘matching costs’ be deleted and replaced with the following:
“The Interpretations Committee noted that, consistent with the decision noted in paragraph BC14 of the Basis for Conclusions on IFRIC 21, it would be inappropriate to address the treatment of costs of a levy in the context of an interpretation of a standard that deals only with the recognition and measurement of liabilities.”
Download the full comment letter below.