IFRS Interpretations Committee Publishes Proposed Guidance on Levies Charged by Public Authorities on Entities That Operate in a Specific Market
The IFRS Interpretations Committee, responsible, in co-operation with the IASB, for developing amendments and Interpretations of International Financial Reporting Standards (IFRSs), published for public comment proposed guidance on the accounting for levies charged by public authorities on entities that operate in a specific market.
A public authority may impose a levy on entities that operate in a specific market, such as a specific country, a specific region or a specific market in a specific country.
The Interpretations Committee was asked to consider how an entity would account for the payment of levies, other than income taxes, in its financial statements; specifically, when the liability to pay a levy should be recognised. The proposed guidance clarifies that the obligating event that gives rise to a liability to pay a levy is the activity that triggers the payment of the levy as identified by the legislation.
The draft Interpretation DI/2012/1 Levies Charged by Public Authorities on Entities that Operate in a Specific Market is open for public comment until 5 September 2012.