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IFRIC 18 Transfers of Assets from Customers

Published January 2009. Effective for annual periods beginning on or after 1 July 2009 (1 November 2009 for EU preparers). Earlier adoption is permitted provided that the valuations and other information needed to apply to the Interpretation to past transfers were obtained when those transfers were made. Withdrawn for periods starting on or after 1 January 2018 when IFRIC 18 is superseded by IFRS 15 Revenue from Contracts with Customers.

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IFRIC 18 provides additional guidance to that given by, in particular, IAS 18 on reporting the transfer of assets from customers.

The Interpretation is particularly relevant to utility companies. It deals with the situation where a customer gives an item of property, plant or equipment (or cash to acquire such an item) to a company, which the company then uses to provide the customer with a supply of, for example, water, gas or electricity.

The Interpretation states that:

  • The item of PPE is recognised in the recipient company’s financial statements when it meets the definition of an asset from that company’s perspective. 
  • The deemed cost of the PPE is its fair value on the date of the transfer
  • The recipient company recognises revenue when the agreed service is provided to the customer.
  • If separately identifiable services are provided to the customer in return for the item of PPE, then total revenue is allocated to each service and recognised separately.
  • If the recipient company is obligated to provide an ongoing service, then it recognises revenue over a period in accordance with the terms of the customer agreement. Where such a period is not specified, revenues is recognised over a maximum of the length of the useful life of the item of PPE transferred.

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Annual period starts Effective version of standard Notes on amendments
1 January 2016 – 31 December 2017 IFRIC 18 2017 Required Standards -

The following interpretation refers to IFRIC 18

IFRSs referred to by IFRIC 18

This page was last updated 21 March 2019.