IFRIC 12 Service Concession Arrangements

Synopsis

A service concession arrangement is an arrangement where a government or other body grants a contract for the supply of public services to a private operator.

IFRIC 12 identified two types of service concession arrangements:

• One in which the operator has a contractual right to receive cash or another financial asset from the government
• One in which the operator has the right to charge for access to the service that it supplies.

In the first arrangement the operator should recognise a financial asset at fair value to the extent that it has an unconditional contractual right to receive cash or another financial asset.

In the second arrangement the operator should recognise an intangible asset to the extent that it receives a right to charge users of the public service.

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Recent amendments

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The following interpretation refers to IFRIC 12

• SIC 29 Disclosure – Service Concession Arrangements

IFRSs Referred to by IFRIC 12

• IFRS 1 First Time Adoption of IFRS
• IFRS 7 Financial Instruments: Disclosures
• IFRS 9 Financial Instruments
• IFRS 15 Revenue from Contracts with Customers
• IFRS 16 Leases
• IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
• IAS 11 Construction Contracts
• IAS 16 Property, Plant and Equipment
• IAS 17 Leases
• IAS 18 Revenue
• IAS 20 Accounting for Government Grants and Disclosure of Government Assistance
• IAS 23 Borrowing Costs
• IAS 32 Financial Instruments: Presentation
• IAS 36 Impairment of Assets
• IAS 37 Provisions, Contingent Liabilities and Contingent Assets
• IAS 38 Intangible Assets
• IAS 39 Financial Instruments: Recognition and Measurement 

This page was last updated 24 February 2022.