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IFRIC 5 Decommissioning, Restoration and Environmental Rehabilitation Funds

Published December 2004. Effective 1 January 2006.

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Synopsis

IFRIC 5 applies to those entities which establish and make contributions to decommissioning funds. Such funds are generally administered by separate trustees who invest contributions made by the entities in a range of assets and then reimburse the entities in the future for decommissioning costs paid.

IFRIC 5 addresses how a contributor should account for:

  • its interest in a decommissioning fund, and
  • the obligation to pay extra contributions.

The interpretation requires that IAS 27, SIC 12, IAS 28 and IAS 31 are applied in deciding how to account for an interest in a decommissioning fund. If none of these applies, then the future obligation and associated reimbursement are accounted for according to IAS 37.

Obligations to pay extra contributions should be accounted for in accordance with IAS 37.

Which version of the interpretation?

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Annual period starts Effective version of standard Notes on amendments
On or after 1 January 2018 IFRIC 5 2019 Required Standards Includes amendment 1
1 January 2016 – 31 December 2017 IFRIC 5 2017 Required Standards Does not include the amendment

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 5 2019 Required Standards.

Recent amendments

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1. IFRS 9 amendment to IFRIC 5

Effective for annual periods beginning on or after 1 January 2018. Earlier application is permitted.

IFRS 9 amends IFRIC 5 to replace reference to IAS 39 with reference to IFRS 9.