Service Concession Agreement
IFRIC 12 applies to concessions granted in the public/private sector, in which the public body (the donor) controls and/or regulates the services provided by the private entity. The operator recognizes an intangible asset to the extent that it obtains the right (a licence) to charge utility users. The user`s right to pay for the public service is not an unconditional right to cash payment, since the amounts depend on the use of the public service. IFRIC 12 allows for the possibility that both types of agreements can be concluded under a single contract: to the extent that the government has provided an unconditional payment guarantee for the construction of the public asset sector, the operator has a financial asset; to the extent that the operator must rely on the public use of the service to obtain payment, the operator has an intangible asset. Uyi is a partner with extensive experience in the areas of ifrs implementation, reporting and accounting services. His professional experience spans ten (10) years of consulting with various industrial companies… Plus (b) the deficit (between the amounts received from users of the service and the amounts shown); or contractual obligations to restore the infrastructure to a given level of maintenance facility: there is also no specific IFRS applicable to a case where an operator, in a service concession agreement, breaches its right of access to infrastructure to a third party. However, this article will contribute to the analysis of applicable IFRS in accordance with the requirements of the standard. Under ASC 853, a service concession agreement is counted as an outsourcing contract with the government for the management and maintenance (and in some agreements) of the constitution or improvement of government assets. Compared to the reporting of an entity that creates and operates its own assets, service concession reports can give the trader significantly different and unexpected results, including: the financial investment model (the donor`s consideration) and intangible assets (right to receive cash flow from users of these infrastructure services). The operator recognizes a financial asset to the extent that it has the unconditional contractual right to receive cash or other financial assets from or on the donor`s instruction for construction work. The operator has an unconditional right to cash payment if the funder contractually guarantees to pay the operator a road construction contract; The type of contract is a public-private service concession agreement. A service concession agreement is an agreement whereby a government or other public body enters into contracts with a private operator for the development (or modernization), operation and maintenance of the funder`s infrastructure resources such as roads, bridges, tunnels, airports, energy distribution networks, prisons or hospitals.