IFRIC Interpretation 4 Determining whether an Arrangement contains a Lease - containsaLease

IFRIC Interpretation 4 Determining whether an Arrangement contains a Lease

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IFRIC Interpretation 4 Determining whether an Arrangement  contains a Lease This version includes amendments resulting from IFRSs issued up to 31 December 2010 with an effective   date no later than 1 January 2011. IFRIC 4   Determining whether an Arrangement contains a Lease  was developed by the International  Financial Reporting Interpretations Committee and issued by the International Accounting Standards  Board in December 2004. IFRIC 4  and its accompanying documents were amended by  IFRIC 12   Service Concession Arrangements  (issued November 2006). Amendment related to an effective date later than 1 January 2011 The  Basis for Conclusions  on IFRIC 4 has been amended for consistency with IFRS 9  Financial  Instruments  (issued November 2009 and October 2010). IFRS 9 has an effective date of 1 January  2013 and the amendment is therefore not included in this edition. IFRIC Interpretation 4  Determining whether an Arrangement contains a Lease  ( IFRIC 4 ) is set out in  paragraphs 1 17  and the  Appendix IFRIC 4  is accompanied by  illustrative examples  and a  Basis for   Conclusions . The scope and authority of Interpretations are set out in  paragraphs 2  and  7 16  of the  Preface to International Financial Reporting Standards . IFRIC Interpretation 4 Determining whether an Arrangement contains a Lease References •      IAS 8   Accounting Policies, Changes in Accounting Estimates and Errors •      IAS 16   Property, Plant and Equipment  (as revised in 2003) •      IAS 17   Leases  (as revised in 2003) •      IAS 38   Intangible Assets  (as revised in 2004) •      IFRIC 12   Service Concession Arrangements Background 1     An entity may enter into an arrangement, comprising a transaction or a series of related  transactions, that does not take the legal form of a lease but conveys a right to use an asset (eg an  item of property, plant or equipment) in return for a payment or series of payments. Examples of  arrangements in which one entity (the supplier) may convey such a right to use an asset to another  entity (the purchaser), often together with related services, include: •     outsourcing arrangements (eg the outsourcing of the data processing functions of an entity).
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•     arrangements in the telecommunications industry, in which suppliers of network capacity enter  into contracts to provide purchasers with rights to capacity.
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