Nor are there specific IFRS applicable where, in the case of a service concession agreement, an operator re-leases its right of access to the infrastructure to a third party. However, this article will contribute to the analysis of the relevant IFRS, which apply in accordance with the requirements of the standard. IFRIC 12 distinguishes between two types of service concession agreements. IFRIC 12 applies to public-private service concession agreements under which the public body (the concessionaire) controls and/or regulates the services provided by the private entity (the operator) with the infrastructure. IFRIC 12 Concession Arrangement Guide In February 2011, Deloitte IFRIC`s IFRIC IFRS Global Office published 12 Services Concession Arrangements – Handheld Guide. For more information on service concessions, see Chapter 13 of pwC`s “Revenue from Customer Contracts” and check out our podcast. IPSAS 32 provides for the approach, valuation and disclosure by the concessionaire of service concession assets and associated commitments, revenues and expenses. The criteria set out in IFRIC 12 Service Concession Agreements to determine whether the operator controlled the asset used in a service concession contract are also used in IPSAS 32 to assess whether the concessionaire controlled the asset. This approach minimizes the possibility that neither the operator nor the licensor will recognise the value of the service concession. Financial asset model (right to obtain consideration from the licensor) and intangible assets model (right to obtain cash flows from users of these infrastructure services).
Uyi is a partner with extensive experience in the areas of IFRS implementation, reporting and accounting. His professional experience extends over ten (10) years of consulting in different industries. Click here for IFRIC 12 Services Concession Arrangements – A pocket practical guide (PDF 241k, February 2011, 59 pages). Although not all infrastructure contracts are service concession agreements with a public body, it is important to know when they are, as this can have accounting consequences. The operator of a service concession agreement shall register and measure the product in accordance with IAS 11 and 18 for the services it provides. . . .