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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.

Download

Correction list for hyphenation

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