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IFRS in Focus — IFRS Interpretations Committee issues Draft Interpretation on the accounting for levies

Published on: Jun 07, 2012

This newsletter describes the proposals in the recently issued Draft Interpretation DI/2012/1 Levies Charged by Public Authorities on Entities that Operate in a Specific Market, published by the IFRS Interpretations Committee on May 31, 2012.

The draft Interpretation was developed in response to a request to
clarify when a liability should be recognized for levies that are conditional on an entity participating in an activity on a specified date.

The draft Interpretation addresses the following questions.

  • What is the obligating event that gives rise to a liability to pay a levy?
  • Does the economic compulsion to continue to operate in a future period create a constructive obligation to pay a levy that will arise from operating in that future period?
  • Does the going concern principle imply that an entity has a present obligation to pay a levy that will arise from operating in a future period?

Download our analysis of the requirements of the Draft Interpretation below.


Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.