IFRS Interpretation on Levies

Date recorded:

In May 2012 the Interpretation Committee (IC) published the draft interpretation (of IAS 37) on the accounting for levies charged by public authorities on entities that participate in a specific market. At its March 2013 meeting, the IC completed its deliberations and reached a consensus on the levies interpretation. The final interpretation was attached to the agenda paper.

The objective of the discussion at the IASB meeting was to ratify the interpretation.

The main changes in the final interpretation comparing to the draft relate primarily to the scope of the interpretation as the final interpretation now also addresses the levies with minimum thresholds.

The Board was satisfied with the due process.

When put to the vote to ratify, one Board member said that he would agree but with a ‘hard feeling’. Another Board member believed that there was no benefit in the interpretation as it seemed to contradict to the Board’s discussions about the new Conceptual Framework. Besides, the scope seemed too broad as it covered all levies but there was a variety of arrangements around the world and therefore there might be some unintended consequences.

All, but one Board members voted to ratify the interpretation.

The application date is going to be 1 January 2014 (with retrospective application).

The IC will issue Interpretation X Levies.

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