 IAS 17: Accounting for Service Concession Arrangements
Combining and Segmenting Service Concession Contracts
The IFRIC continued its discussions from the previous day on combining or segmenting of service concession arrangements. The IFRIC agreed that the development of a position on combining and segmenting concessions arrangements should use the same language and semantics as in the IFRIC's separate project on Combining and Segmenting Contracts more generally.
Overview Issues
The IFRIC determined that they needed to address in more detail the issues around the nature of the asset held by the concession operator before progressing with the more specific issues. The IFRIC discussed the various implications for the amount and timing of revenue recognised under various models depending on whether the physical asset was recognised by the concession operator, a receivable was recognised by the concession operator or an intangible asset was recognised by the concession operator. The staff agreed to present a paper on the nature of the concession operator's asset in various situations as the June IFRIC meeting.
IAS 27 - Fiduciary Control
The IFRIC discussed whether to add an agenda item to address whether (or when) delegated or operational control should require consolidation. IFRIC members noted this would end up being an interpretation of what "so as to receive economic benefits" means in the definition of control in IAS 27. The IFRIC concluded that this is a broader issue of consolidation that should be addressed by the IASB in its project. The IFRIC will, however, ask the IASB to identify areas IFRIC should address (if any) in conjunction with the IASB project.
IFRS 2 - Consolidation of Share Trusts
The IFRIC discussed consolidation issues related to trusts used to undertake share-based payment transactions in accordance with IFRS 2. The IFRIC was asked and generally concluded in favour of issuing an interpretation to eliminate the scope exemption in SIC 12 for equity compensation benefits. This draft interpretation would be issued shortly. The IFRIC agreed to take on a second phase to address whether guidance should be issued on applying the consolidation model to these trusts. These issues will be discussed further at future IFRIC meetings.
The IFRIC also noted that the scope exemption in SIC 12 should be aligned with the scope of IAS 19.
IFRIC D3: Determining Whether an Arrangement Contains a Lease
The IFRIC was provided with a summary of comment letters on D3. The IFRIC concluded that it should continue with the project, but that field tests should be conducted. Some IFRIC members noted their objection to the general model and would rather have a model based on control of the asset – not control over the output as required in D3. The IFRIC agreed to reconsider this model, noting the requirements in EITF Issue 01-8.
The IFRIC discussed at length the issue of components and proportions of an asset. Some IFRIC members suggested remaining silent on these issues. Other members noted a model based on output is flawed if IFRIC does not answer 'output from what'.
The IFRIC noted that a final interpretation should be effective for 2005 first-time adopters.
IFRIC D4: Decommissioning, Restoration and Environmental Rehabilitation Funds
The IFRIC was presented with a summary of comment letters on D4. The IFRIC decided to reconsider whether a model based on IAS 37 or IAS 39 was appropriate. This analysis will be conducted as a result of comments received on whether the asset cap equal to the liability is appropriate.
This summary is based on notes taken by observers at the IFRIC meeting and should not be regarded as an official or final summary.
Scroll down for notes from 4 May 2004.
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