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Newsletter on IFRIC 18

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17 Feb 2009

Deloitte's IFRS Global Office has published an IAS Plus Update Newsletter – Guidance Issued on Accounting for Transfers of Assets from Customers.

The newsletter explains IFRIC 18 Transfers of Assets from Customers, which was published on 29 January 2009 and will be effective for transfers received received from customers on or after 1 July 2009.
  • The basic principle of IFRIC 18 is that when the item of property, plant and equipment transferred from a customer meets the definition of an asset under the IASB Framework from the perspective of the recipient, the recipient must recognise the asset in its financial statements. If the customer continues to control the transferred item, the asset definition would not be met even if ownership of the asset is transferred to the utility or other recipient entity.
  • The deemed cost of that asset is its fair value on the date of the transfer.
  • The timing of the recognition of the revenue arising from the transfer will depend on the separately identifiable services included in the agreement.

Click to view IAS Plus Update Newsletter – Guidance Issued on Accounting for Transfers of Assets from Customers (PDF 107k).

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