ICAEW.com works better with JavaScript enabled.

IFRIC 1 Existing Decommissioning, Restoration and Similar Liabilities

Published May 2004. Effective 1 September 2004.

Become a Financial Reporting Faculty member

Find out more about the benefits of membership and joining details.

Join now


Free to view

Financial Reporting Faculty members only


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.

The International Accounting Standards Board (IASB) provides free access to the consolidated unaccompanied international accounting standards for the current year through its website. Free registration is required.

Which version of the interpretation?

Financial Reporting Faculty members who joined the faculty prior to 1 November 2022 have premium access to the consolidated edition of IFRS and amendments through the IASB's IFRS Standards Navigator service. Please log into IFRS Standards Navigator to access electronic versions of the standards through these links.

Please be aware that as part of the changes to ICAEW faculty membership, this service will be withdrawn after 31 December 2022.

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.

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 4 February 2022.