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IFRIC 1 Existing Decommissioning, Restoration and Similar Liabilities

Published May 2004. Effective 1 September 2004.

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IFRIC 1 applies where an entity has previously included decommissioning or restoration costs within the cost of an item of property, plant or equipment, and created a corresponding provision. Such a provision should be discounted to present values using a current market-based discount rate.

IFRIC 1 addresses changes in the value of the provision which may arise from

  • Changes in the discount rate
  • Revised estimates of the timing and amount of costs.

If an entity applies the cost model to property, plant and equipment, these changes in the value of the provision are required to be capitalised as part of the cost of the asset and depreciated.

If an entity applies the revaluation model to property, plant and equipment, the changes in value of the provision must be recognised as other comprehensive income and accumulated within the revaluation surplus.

Which version of the interpretation?

'Which version of the interpretation?' is only available to members of the Financial Reporting Faculty. Please note that to access electronic versions of IFRS through the links in these standard trackers you need to have first logged into eIFRS.

Annual period starts Effective version of standard Notes on amendments
On or after 1 January 2019 IFRIC 1 2021 Required Standards Includes amendment 1
1 January 2018 – 31 December 2018 IFRIC 1 2018 Required Standards Does not include the amendment

The Required Standards book for a particular year assumes that there is no early application of issued but not yet effective IFRSs; The Issued Standards book assumes early application of all issued IFRSs.

For the latest version of the interpretation, and where the amendment is to be adopted early, refer to IFRIC 1 2021 Required Standards.

Recent amendments

Full access to details of all the amendments is only available to Financial Reporting Faculty members. Find out how to join the faculty.

1. IFRS 16 Leases amendment to IFRIC 1

To be applied to periods beginning on or after 1 January 2019. Earlier adoption is permitted.

The scope paragraph of IFRIC 1 is amended to clarify that the interpretation applies to any decommissioning, restoration or similar liability that is part of the cost of a right-of-use asset.

IFRSs referred to by IFRIC 1

Current proposals

ED/2019/7 General Presentation and Disclosures was issued in December 2019. The exposure draft proposes a new IFRS Standard to replace IAS 1. One of the proposed changes is to classify income and expenses in the statement of profit or loss as operating, investing or financing. In accordance with this, references to ‘finance costs’ in IFRIC 1 would be amended to be references to ‘interest expense not arising from financing activities’.

This page was last updated 22 January 2021.