IFRIC 21 — Accounting for cost of levy on PPE of service provider

Date recorded:

The project manager introduced the agenda paper and she said that the issue was discussed in September 2014. The Interpretations Committee decided not to add the issue into its agenda because it was not their practice to give advice on a case by case basis and it was difficult for them to define a principle. She said that respondents said the Interpretations Committee should strengthen the lack of guidance about cost which was reflected in the revised agenda decision. She also said that based on comment letters received, the staff decided to delete the reference to the Conceptual Framework and to matching in the final agenda decision.

The Interpretations Committee members expressed agreement with the agenda decision.

One Interpretations Committee member said that in reference to the paragraph that indicated that the Interpretations Committee members were unable to identify a general principle that it should be clarified that there was guidance available in different standards but it would be difficult for them to go back to each standard to identify all possible applicable situations. The Chairman agreed with this concern.

One Interpretations Committee member said that the ESMA issue had not been addressed (whether service providers could recognise inventory). Another member said that he was concerned about the implications for enforcement agencies. He asked whether the drafting could lead to the conclusion that service providers could recognise inventory. The project manager responded that in the analysis provided in September, the staff had indicated that IAS 2 could support the view that service providers could have inventory, she then said that several Interpretations Committee members were not comfortable with that assessment and that paragraph was removed.  The Chairman said that if the recognition of inventory by service providers was the issue, that issue was much bigger than the debit side on levies. He said that if they would receive further concerns they would take the issue back. He then called to vote and no objections were raised to the agenda decision.

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