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HendangHendang TT--([email protected])([email protected])
ISAK 16 (2010)IFRIC 12
1
IKATAN AKUNTAN INDONESIA
Indonesian Institute of Accountants
Narasumber: Dr. Hendang Tanusdjaja, CPA
Partner KAP Darmawan, Hendang & Yogi (AGN Int’l)
Anggota Tim Implementasi IFRS-IAI
Jakarta, 16 Nopember 2011
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HendangHendang TT--([email protected])([email protected])
Issue Key requirement of IFRIC 12
Operator’s rights over the
infrastructure assets
The infrastructure assets are not recognised as the
property, plant or
equipment (PPE) of the operator.
Revenue recognition Revenue is recognised and measured in accordance
with IAS 11 (for construction or upgrade services) and/or IAS 18
(for operation services,
where the operator operates and maintains the
infrastructure).
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HendangHendang TT--([email protected])([email protected])
Issue Key requirement of IFRIC 12
Construction or upgrade
services
The consideration received by the operator is
recognised at fair value.
Consideration may result in the recognition of a
financial asset or an
intangible asset.
• The operator recognises a fi nancial asset if it has
an unconditional contractual right to receive cash
or another fi nancial asset from or at the direction
of the grantor in return for constructing or
upgrading the public sector asset.
• The operator recognises an intangible asset if itreceives only a right to charge for the use of the
public sector asset that it constructs or upgrades.
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HendangHendang TT--([email protected])([email protected])
Issue Key requirement of IFRIC 12
Construction or upgrade
services
• IFRIC 12 allows for the possibility that both types
of consideration may exist within a single
contract. For example, to the extent that the
grantor has given to the operator an unconditional
guarantee of minimum payments for the
construction, the operator recognises a financial
asset. The operator may also recognise an
intangible asset representing the right to charge
users of the public service that is in addition to
the minimum guaranteed payments.
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Issue Key requirement of IFRIC 12
Operator’s contractual
obligations to maintain/
restore the infrastructure
to a specifi ed level of
serviceability
Contractual obligations to maintain or restore
infrastructure, except for any upgrade element,
should be recognised and measured in accordance
with IAS 37, i.e. at the best estimate of the
expenditure that would be required to settle the
present obligation at the end of reporting period.
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Issue Key requirement of IFRIC 12
Borrowing costs incurred
by the operator
Borrowing costs incurred by the operator that are
attributable to the arrangement are recognised as an
expense in the period incurred unless the operator has acontractual right to charge users of the public service
(intangible asset model). In this case borrowing costs
attributable to the arrangement should be capitalised
during the construction phase of the arrangement in
accordance with IAS 23
Borrowing Costs.
6
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Issue Key requirement of IFRIC 12
Subsequent accounting
treatment of a financial
asset
IAS 39 and IFRS 9 (if adopted) apply to the fi nancial asset
recognised under IFRIC 12. Under IAS 39, depending on
whether the fi nancial asset is classifi ed as a loan or
receivable, as an available-for-sale financial asset or
designated as at fair value through profi t or loss, it is
subsequently measured either at amortised cost or fair
value, respectively. If IFRS 9 is applied, the financial asset
will be measured at amortised cost or at fair value through
profit or loss.
7
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Issue Key requirement of IFRIC 12Subsequent
accounting
treatment of a
financial
asset
IAS 39 and IFRS 9 (if adopted) apply to the fi nancial asset
recognised under IFRIC 12. Under IAS 39, depending on
whether the fi nancial asset is classifi ed as a loan or
receivable, as an available-for-sale financial asset or
designated as at fair value through profi t or loss, it is
subsequently measured either at amortised cost or fair value,respectively. If IFRS 9 is applied, the financial asset will be
measured at amortised cost or at fair value through profit or
loss.
Subsequent
accountingtreatment of an
intangible Asset
IAS 38 Intangible Assets applies to the intangible asset
recognised under IFRIC 12. IAS 38 allows intangible assets to be
measured using
the cost model or the revaluation model if there is an active
market for
service concession arrangements.
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Characteristics Type of
asset
recognised
by the
operator
Reason
Hospital – the operator receives afixed amount of revenue, subject to
deductions for lack of availability.
Financialasset
• Revenue not dependent onusage.
• Deductions refl ect failure to
meet specifi ed quality
requirements.
Toll road – the amounts receivable
by the operator are subject to littlevariation in practice because the
road is an established route with
highly predictable level of tolls.
Intangible
asset
• Right to charge users.
• Amounts depend on usage ofthe infrastructure, regardless of
whether variation in usage is
expected in practice.
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Characteristics Type of asset
recognised by
the operator
Reason
Toll road – the operator has a
guarantee by the grantor of
minimum revenue that will notfall below a specifi ed level.
The guarantee is achieved
through an increase in the
concession period.
Intangible
asset
• Right to charge users.
• Amounts depend on usage of
the infrastructure.• Shortfall guaranteed by the
grantor via a concession
extension and not via a right to
receive cash.
Water supply concession – the
grantor regulates prices that the
operator may charge to users
or adjusts the duration of the
concession based on a targeted
rate of return.
Intangible
asset
• Right to charge users.
• Amounts depend on usage of
the infrastructure.
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Characteristics Type of assetrecognised by
the operator
Reason
Rail concession - the grantor pays
the operator any shortfall between
the actual benefi t before interestand tax obtained through charging
users, and a fi xed minimum.
Intangible
asset and
fi nancial asset- Bifurcated
model
• Right to charge users.
• Amounts depend on usage of
the infrastructure.• Shortfall guaranteed by the
grantor.
• Financial asset arises from the
right to receive a minimum
determinable amount of cash
from users/grantor andintangible asset from the right
to earn additional amounts
above the fi xed guaranteed
payments.
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Characteristics Type of assetrecognised by
the operator
Reason
Toll bridge - the grantor pays a
fi xed payment based on
availability during the fi rst halfof the concession period and then
switches to usage payment.
Intangible
asset and
fi nancial asset- Bifurcated
model
• Grantor pays operator.
• Amounts do not depend on
usage of the infrastructureduring the fi rst half of the
concession and are usage
dependent during the second
half.
• Financial asset arises from the
right to receive cash fromgrantor during the fi rst part of
the concession irrespective of
usage; the intangible asset
arises from the right to charge
the grantor in the second half
based on usage.14
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An operator enters into a contract to provide construction servicescosting CU100. It has been determined that the fair value of theconstruction services provided is CU110. The total cash inflows over theentire life of the contract are fi xed by the grantor at CU200. The financerevenue to be recognised that is calculated by using the effective interestrate method in accordance with IAS 39 is CU10 over the entire life of the
service concession arrangement, and the balance of CU80 (CU200 -CU110 - CU10) relates to services provided during the operational phase.The following journal entriesare made in this scenario.
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an operator enters into a contract to provide construction services costingCU100. It has been determined that the fair value of the constructionservices provided is CU110. The total cash infl ows over the entire life ofthe contract are expected to be CU200, however this amount is notguaranteed by the grantor. The following entries are made in this scenario:
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An operator enters into a contract to provide constructionservices costing CU100. It has been determined that the
fair value of the construction services provided is CU110.
The total cash infl ows over the entire life of the contract
are expected to be CU200. Of these, CU60 are guaranteed by the grantor. The appropriate fi nance revenue to be
recognised derived from applying the effective interest
rate method in accordance with IAS 39 is in total CU6
over the entire life of the service concession arrangement.
The following entries are made in this scenario:
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Diskusi dan Tanya Jawab
Thank you
IKATAN AKUNTAN INDONESIA
Indonesian Institute of Accountants
Hendang Tanusdjaja
0816808105