• Register
Return to: Home > News > Regulation > IFRS proposes guidance on levies and put options

IFRS proposes guidance on levies and put options

The IFRS Interpretations Committee has proposed guidance on the accounting for levies charged by public authorities on entities that operate in a specific market.

The committee has also proposed guidance on the accounting for a put option written by a parent entity on the shares of its subsidiary held by a non-controlling-interest shareholder.

In the first proposal, DI/2012/1 Levies Charged by Public Authorities on Entities that Operate in a Specific Market, the committee said it considered how an entity would account for the payment of levies, other than income taxes, in its financial statements and when the liability to pay a levy should be recognised.

The proposal states that an 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.

In the second proposal, DI/2012/2 Put Options Written on Non-controlling Interests, the committee considered how to measure the financial liability created when a parent entity is obliged to purchase the shares of its subsidiary for cash or for another financial asset and the parent must recognise a financial liability in its consolidated financial statements for the present value of the option exercise price.

The proposed guidance also specifies that all changes in the measurement of that financial liability should be recognised in profit or loss in accordance with IAS 39 Financial Instruments: Recognition and Measurement and IFRS 9 Financial Instruments.

Deadline for comments on the levies and put option proposals is 5 September and 1 October, respectively.

 

Top Content

    Addressing tax challenges and the digitisation of the economy

    As the economy becomes even more globalised through digital sources, the tax systems currently in place need to be scrutinised to examine whether they are still fit for current and emerging business models. Joe Pickard reports on the OECD’s approach to this issue.

    read more

    Primary financial statements: a game changer in reporting?

    International Accounting Standards Board chair Hans Hoogervorst delivered a speech at the Seminario International sobre NIIF y NIF, organised by the Consejo Mexicano de Normas de Información Financiera in Mexico. The Accountant presents the highlights.

    read more

    FASB readies standards for the netflix generation

    The US Financial Accounting Standards Board (FASB) has updated its accounting standard for entertainment, with a specific eye on keeping up to date with how episodic content, such as television programmes, is consumed in the modern world. Jonathan Minter reports.

    read more

    Brexit: why it takes two to tango

    Former TA editor Vincent Huck, now editor of Insurance Asset Risk, looks at why Brexit might unleash geopolitical intrigue in Europe’s accounting standard-setting scene – and why IFRS 17 will be an incredible source of opportunity for firms in the coming years.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.