Effective date of IFRIC 21
IFRIC 21 Levies was issued on 20 March 2013 and is effective for annual periods beginning on or after 1 January 2014.
IFRIC 21 identifies the obligating event for the recognition of a liability as the activity that triggers the payment of the levy in accordance with the relevant legislation. The Interpretation clarifies that 'economic compulsion' and the going concern principle do not create or imply that an obligating event has occurred.
IFRIC 21 provides the following guidance on recognition of a liability to pay levies:
- The liability is recognised progressively if the obligating event occurs over a period of time
- If an obligation is triggered on reaching a minimum threshold, the liability is recognised when that minimum threshold is reached.
News item: New Interpretation on accounting for levies.
