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In May 2012, the IFRS Interpretations Committee (the “Interpretations Committee”) published the Draft Interpretation DI/2012/1 'Levies Charged by Public Authorities on Entities that Operate in a Specific Market'. EFRAG acknowledges that the IASB received requests for guidance on the accounting for levies in the financial statements of the entity paying the levy, and that subsequent outreach activities identified that there is diversity in practice in how entities account for the obligation to pay levies in a number of situations and the issue is widespread. Therefore, EFRAG thinks that specific guidance in this case will contribute to consistency in accounting for levies.
EFRAG acknowledges that the consensus is consistent with the principles in the Conceptual Framework and IAS 37. EFRAG encourages the IFRS Interpretation Committee to analyse and explain why they could not decide to observe similar consistency in addressing the accounting for levies due only if a minimum revenue threshold is achieved. Furthermore, EFRAG recommends that the IASB make clearer that the scope of the Draft Interpretation includes within its scope the majority of payments to public authorities (e.g. property tax).
In addition, EFRAG asks constituents specific questions about the scope of the Draft Interpretation, whether or not the resulting financial information is decision-useful, and if there are levies that give rise to an asset (e.g. a right to operate until the next levy payment is due).