Global Standards for the world economy

Sunday 30 April 2017

Banner graphic


IFRIC 12 Service Concession Arrangements

Service concession arrangements are arrangements whereby a government or other body grants contracts for the supply of public services�such as roads, energy distribution, prisons or hospitals�to private operators. The objective of this project of the IFRIC is to clarify how certain aspects of existing IASB literature are to be applied to service concession arrangements.

On 30 November 2006, the International Financial Reporting Interpretations Committee (IFRIC) issued an Interpretation�IFRIC 12 Service Concession Arrangements. IFRIC 12 addresses how service concession operators should apply existing International Financial Reporting Standards (IFRSs) to account for the obligations they undertake and rights they receive in service concession arrangements.

In developing its guidance the IFRIC drew on the experience of operators involved in a variety of service concessions across the world. In recognition of the size of the project, the Board extended the normal due process for a draft Interpretation by holding a public consultation to satisfy itself that application of the Interpretation would result in a fair presentation of the financial position and financial performance of concession operators. The strong, positive response to that consultation satisfied the Board that such was the case. Click here for the Press Release.

Subscribers to the IASB�s Comprehensive Subscription Service can view the Interpretation from the secure online services area of the IASB�s Website ( Those wishing to subscribe should contact:

IASC Foundation Publications Department 

30 Cannon Street, London EC4M 6XH, United Kingdom

Tel: +44 (0)20 7332 2730 Fax: +44 (0)20 7332 2749

email: Web: 

Further information:

  •   Project plan
  • Click here to download a full project summary in pdf format (last updated 29/09/06).
  • The latest draft of the contextual outline and decision trees are available here.
  • The IFRIC published for comment draft Interpretations D12-D14 Service Concession Arrangements on 3 March 2005. The full text of the draft Interpretations is available here.
  • The IFRIC welcomed comments on any aspect of the draft Interpretations. The deadline for receipt of comments was 31 May 2005. The comment letters received on the proposals are  available here .


Project contact:

Illustrative examples:

The draft Interpretations contain examples illustrating the application of the two accounting models proposed. The purpose of these examples is to illustrate the accounting requirements clearly and concisely. Hence, they are based on simplified assumptions. Most notably, the concessions last for a period of only 10 years.

In practice, service concessions typically last for longer periods and have more complicated fact patterns than those illustrated in the draft Interpretations. A group of constituents suggested that it would be useful for commentators to see the impact of the proposals on a more life-like example. The IFRIC agreed with this suggestion and invited the constituents to prepare an example for the IFRIC website.

The example prepared by the constituents, which comprises a detailed spreadsheet model and explanatory notes, is posted below. The IFRIC has not reviewed this example and can give no reassurances regarding the realism of the assumptions or the accuracy of the model.

The IFRIC hopes that constituents will find these examples useful and use them to illustrate their comments when responding to the proposals.

The IFRIC thanks the constituents who prepared the examples. It is grateful for their assistance.

Project contact: