IFRIC 12 provides for the possibility that both types of agreements may exist within a single contract: to the extent that the government has given an unconditional guarantee for the payment of the construction of the public asset, the operator has a financial asset; to the extent that the operator must rely on the public using the service to receive payment, the operator has an intangible asset. When a third party (for example. B a subcontractor) participates in the supply of a particular good or service, the group must determine whether it takes control of those goods or services before being transferred to the customer. Where control is acquired prior to the transfer to the customer, the group shall record as turnover the gross amount to which it is entitled in exchange for the corresponding goods or services. Consolidated revenue from contracting activities (VINCI Energies, Eurovia and VINCI Construction) includes the sum of works, goods and services generated by consolidated subsidiaries carrying out their main activity, as well as revenues related to the construction of infrastructure under concession. The guide is intended to serve as an eloquent tool for the reader in the application of IFRIC 12 service concession agreements and will provide an analysis of IFRIC 12 requirements and practical instructions with examples dealing with some of the more complex issues related to service concession agreements. The guide contains guidelines on the scope, determination of the accounting model, specific characteristics of current concessions (take or pay agreements, capacity availability, etc.) and many others. This approach minimizes the possibility that neither the operator nor the licensor will recognise the value of the service concession. The provisions for after-sales service cover the commitments of the group companies under legal guarantees for completed projects, including the 10-year guarantee on construction projects in France. They are estimated statistically on the basis of expenditure incurred in previous years or individually on the basis of concretely identified events.
Click here for IFRIC 12 Services Concession Arrangements – A pocket practical guide (PDF 241k, February 2011, 59 pages). Contractual assets are invoices not yet withdrawn, advances to subcontractors or reserve payments. Under IFRS 9, contract assets are analyzed to assess a potential risk of non-recovery (“credit risk”). . . .