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IAS 37/IFRIC 6 — Levies charged for participation in a market on a specified date

Background

An IFRS Interpretations Committee project to determine whether, under certain circumstances, IFRIC 6 Liabilities Arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment should be applied to other levies charged for participation in a market on a specified date to identify the event that gives rise to a liability.  The scope of the project was subsequently widened to consider a broader range of levies, rather than a focus on levies charged to participate in a market.

Concern relates to when a liability should be recognised and to the definition of a present obligation in IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

The specific examples provided to the Committee include the United Kingdom bank levy, fees paid to the Federal Government by pharmaceutical manufacturers in the US, bank levy in Hungary, and the railway tax in France.  The IFRS Interpretations Committee is expected to assess whether current guidance is sufficient to help preparers of financial statements and others to apply IFRSs to a range of facts and circumstances, rather than to provide answers to each of the specific situations presented to them.

 

Current status of the project

The Committee released Draft Interpretation DI/2012/1 Levies Charged by Public Authorities on Entities that Operate in a Specific Market on 31 May 2012.  The finalised Interpretation, IFRIC 21 Levies, was issued 20 May 2013.

 

Project milestones

DateDevelopmentComments
31 May 2012 Draft Interpretation DI/2012/1 Levies Charged by Public Authorities on Entities that Operate in a Specific Market released Comment deadline 5 September 2012
20 May 2013 IFRIC 21 Levies published Effective for annual reporting periods beginning on or after 1 January 2014

Correction list for hyphenation

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