June 2019 IFRIC Update published by the IFRS Interpretations Committee

Released 21 June 2019

The IFRS Interpretations Committee has released its Update for June 2019, covering topics including the lease term and useful life of leasehold improvements and cryptocurrencies.

The Committee discussed a number of points including:

Compensation to customers for airline delays or cancellations – the committee decided that adequate provisions were included within IFRS 15 Revenue from Contracts with Customers;

Lessee’s incremental borrowing rate – the committee decided that adequate provision for this treatment is included within IFRS 16 Leases;

Lease term and useful life of leasehold improvements where the lease term is indefinite, but can be cancelled by either without penalty – the committee decided that IFRS 16 Leases provides sufficient information to allow an entity to determine the lease term and that IAS 16 Property, Plant and Equipment also provides an adequate basis for an entity to determine the useful life of such a lease improvement;

Holdings of cryptocurrencies – the committee set out a number of standards which it felt apply to cryptocurrencies;

Costs to fulfil a contract over time – the committee deemed that in the scenario described, performance obligations are achieved over time, and as such IFRS 15 Revenue from Contracts with Customers can be applied; and

Subsurface rights for an oil pipeline - the committee found that the provisions of IFRS 16 Leases can be applied to the example.

The full details of the update are available on the IFRS website, as well as on the Croner-i Tax and Accounting platform.

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