The Interpretations Committee discussed a request to clarify whether telecommunication towers should be accounted for as property, plant and equipment, in accordance with IAS 16 Property, Plant and Equipment, or as an investment property, in accordance with IAS 40 Investment Property. The request describes a circumstance in which an entity owns telecommunication towers and leases spaces in the towers to telecommunication operators to which the operators attach their own devices. The entity provides some basic services to the telecommunication operators such as maintenance services. The leasing of spaces in such towers is an emerging business model. In this request, the submitter is specifically seeking a clarification on:
- whether a telecommunication tower should be viewed as a ‘building’ and thus as ‘property’, as described in paragraph 5 of IAS 40; and
- how the service element in the leasing agreement and business model of the entity should be taken into consideration when analysing this issue.
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