IAS 18/IAS 39 — Accounting for trailing commissions
The IFRIC considered a request that it provide guidance on how an entity should account for ongoing commission arrangements, referred to as trailing commissions. The submission was made in the context of investment funds, but IFRIC members noted that such arrangements exist in other contexts, for example, telecommunications.
The IFRIC agreed that it should not add the item to its agenda. However, the IFRIC disagreed with the preliminary staff analysis that suggested that diversity in practice should not arise. Instead, IFRIC members noted that diversity already exists, across industries and across jurisdictions. There was agreement that IAS 32 provided sufficient guidance for the financial asset (although there were measurement challenges) but that revenue recognition was more challenging. However, to address this issue effectively, the IFRIC would have to interpret several different IFRSs, including IAS 18 Revenue, IAS 32 Financial Instruments: Presentation, IAS 27 Consolidated and Separate Financial Statements, and IAS 39 Financial Instruments: Recognition and Measurement. As such, the IFRIC was probably the wrong forum to decide the accounting and was unlikely to achieve consensus in a reasonable period of time.
