The International Financial Reporting Interpretations Committee (IFRIC) issued two draft interpretations entitled:
- D23 Distributions of non-cash assets to owners
- D24 Customer contributions
The purpose of D23 is to enable non-cash assets for distribution to owners to be valued consistently and will therefore be comparable between reporting entities. The draft interpretation requires non-cash assets for distribution to owners to be recognised at the fair value of the asset, even if it differs from its carrying amount.
D24 proposes a change to an existing accounting treatment in Australia. This draft interpretation requires revenue to be recognised at fair value of the asset contribution over the period of supply to a customer.
The current Australian Accounting Standards Board (AASB) interpretation 1017 Developer and customer contributions for connection to a price-regulated network requires a service provider to recognise the equivalent revenue upfront.
While AASB interpretation 1017 covers the same issue, the scope relates to price-regulated networks only. Nonetheless, the AASB plans to withdraw AASB 1017 when the interpretation arising from D24 is issued.
The two draft interpretations have been approved and exposed by the AASB for comment by Australian constituents.
CPA Australia welcomes comments on the draft interpretations, which will help inform CPA Australia about the issues arising in practice.
The IASB requests that comments on the exposure draft be received by Friday 25 April.
Further information
