Accounting For Service Concession Agreements

The “Customer Contract Turnover” guide is a comprehensive resource for companies that disrupt transactions on revenue in accordance with CSA 606. Click on the IFRIC 12 service concession agreements – A practical Taschen guide (PDF 241k, February 2011, 59 pages). IFRIC 12 allows for the possibility that both types of agreements can be concluded under a single contract: to the extent that the government has provided an unconditional payment guarantee for the construction of the public asset sector, the operator has a financial asset; to the extent that the operator must rely on the public use of the service to obtain payment, the operator has an intangible asset. Uyi is a partner with extensive experience in the areas of ifrs implementation, reporting and accounting services. His professional experience spans ten (10) years of consulting with various industrial companies… Plus This treatment applies to most infrastructure concessions, in particular VINCI Autoroutes concessions in France, major airports managed by the VINCI Airports Group and certain bridges. IFRIC 12 applies to concessions granted in the public/private sector, in which the public body (the donor) controls and/or regulates the services provided by the private entity. How the transfer of control of a service or service is analyzed is essential, as this transfer determines the recording of revenue. The transmission of control of a service can be done continuously (recognition of turnover on the basis of financial statements) or at a specified time corresponding to the completion of the work. Changes to the contract, including the price and/or scope of the contract, are recognized with the agreement of the contracting entity. Where changes relate to new products or services considered separate under IFRS 15 and the contract price increases by an amount reflecting the “autonomous selling prices” of additional products or services, these changes are recognized as a separate contract.

Over the past decade, U.S. public infrastructure spending has exceeded $400 billion per year1 and trends suggest that even greater investments will be needed to maintain and modernize the aging of airport roads, bridges, ports and infrastructure. As governments and public sector organizations look for ways to outsource expensive public services, they are increasingly turning to service concession agreements. Under a service concession agreement, a public body grants an operator the right (a concession) to exploit an infrastructure value and to collect and collect royalties (for example. B tolls). Fees can be paid by users or directly by the government. IFRIC 12 distinguishes between two types of service concession agreements.

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