Table of Contents
In December 2001 the International Accounting Standards Board (IASB) issued SIC-29
Disclosure—Service Concession Arrangements, which had originally been developed by the
Standing Interpretations Committee of the International Accounting Standards
In November 2006, when the IASB issued IFRIC 12 Service Concession Arrangements, SIC-29’s
title was changed to Service Concession Arrangements: Disclosures.
Other Standards have made minor consequential amendments to SIC-29, including
IFRS 16 Leases (issued January 2016) and Amendments to References to the Conceptual
Framework in IFRS Standards (issued March 2018).
SIC Interpretation 29 Service Concession Arrangements: Disclosures (SIC-29) is set out
in paragraphs 6–7. SIC-29 is accompanied by a Basis for Conclusions. The scope and
authority of Interpretations are set out in the Preface to IFRS Standards.
FOR THE BASIS FOR CONCLUSIONS, SEE PART C OF THIS EDITION
• IFRS 16 Leases
• IAS 1 Presentation of Financial Statements (as revised in 2007)
• IAS 16 Property, Plant and Equipment (as revised in 2003)
• IAS 37 Provisions, Contingent Liabilities and Contingent Assets
• IAS 38 Intangible Assets (as revised in 2004)
• IFRIC 12 Service Concession Arrangements
An entity (the operator) may enter into an arrangement with another entity
(the grantor) to provide services that give the public access to major economic
and social facilities. The grantor may be a public or private sector entity,
including a governmental body. Examples of service concession arrangements
involve water treatment and supply facilities, motorways, car parks, tunnels,
bridges, airports and telecommunication networks. Examples of arrangements
that are not service concession arrangements include an entity outsourcing
the operation of its internal services (eg employee cafeteria, building
maintenance, and accounting or information technology functions).
A service concession arrangement generally involves the grantor conveying for
the period of the concession to the operator:
(a) the right to provide services that give the public access to major
economic and social facilities, and
(b) in some cases, the right to use specified tangible assets, intangible
assets, or financial assets,
in exchange for the operator:
(c) committing to provide the services according to certain terms and
conditions during the concession period, and
(d) when applicable, committing to return at the end of the concession
period the rights received at the beginning of the concession period
and/or acquired during the concession period.
The common characteristic of all service concession arrangements is that the
operator both receives a right and incurs an obligation to provide public
The issue is what information should be disclosed in the notes in the financial
statements of an operator and a grantor.
Certain aspects and disclosures relating to some service concession
arrangements are already addressed by existing International Financial
Reporting Standards (eg IAS 16 applies to acquisitions of items of property,
plant and equipment, IFRS 16 applies to leases of assets, and IAS 38 applies to
acquisitions of intangible assets). However, a service concession arrangement
may involve executory contracts that are not addressed in International
Financial Reporting Standards, unless the contracts are onerous, in which case
IAS 37 applies. Therefore, this Interpretation addresses additional disclosures
of service concession arrangements.
All aspects of a service concession arrangement shall be considered in
determining the appropriate disclosures in the notes. An operator and a
grantor shall disclose the following in each period:
(a) a description of the arrangement;
(b) significant terms of the arrangement that may affect the amount,
timing and certainty of future cash flows (eg the period of the
concession, re-pricing dates and the basis upon which re-pricing or
re-negotiation is determined);
(c) the nature and extent (eg quantity, time period or amount as
(i) rights to use specified assets;
(ii) obligations to provide or rights to expect provision of services;
(iii) obligations to acquire or build items of property, plant and
(iv) obligations to deliver or rights to receive specified assets at the
end of the concession period;
(v) renewal and termination options; and
(vi) other rights and obligations (eg major overhauls);
(d) changes in the arrangement occurring during the period; and
(e) how the service arrangement has been classified.
An operator shall disclose the amount of revenue and profits or losses
recognized in the period on exchanging construction services for a financial
asset or an intangible asset.
The disclosures required in accordance with paragraph 6 of this Interpretation
shall be provided individually for each service concession arrangement or in
aggregate for each class of service concession arrangements. A class is a
grouping of service concession arrangements involving services of a similar
nature (eg toll collections, telecommunications and water treatment services).
This Interpretation becomes effective on 31 December 2001.
An entity shall apply the amendment in paragraphs 6(e) and 6A for annual periods
beginning on or after 1 January 2008. If an entity applies IFRIC 12 for an earlier period,
the amendment shall be applied for that earlier period.
IFRS 16, issued in January 2016, amended paragraph 5. An entity shall apply that
amendment when it applies IFRS 16.