IFRIC 12 Service Concession Arrangements

This is a presentation on IFRIC 12 Service Concession Arrangements.

Example
X Ltd enters into an arrangement with ABC Government for the construction and maintenance of a road.
Terms of the arrangement
X Ltd should construct the road within 2 years. From the end of 2 year X Ltd will operate the road and at the end of 10th year X Ltd will transfer the road to ABC Government.
Total Cost of Construction
1 year 500
2 year 600

What is the accounting treatment if ABC Government
a. Pays from the end of 3rd to 10th - 200 mn or
b. Grants the right to collect money from public in the form of toll?

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