Draft Interpretations D12 to D16
The Association of Chartered Certified Accountants (ACCA) is pleased to have this opportunity to comment on the above draft interpretations.
D12 Consolidation of Special Purpose Entities
D13 Jointly controlled enterprises: Non-monetary contributions by venturers
D14 Property, plant and equipment: Compensation for impairment or loss of items
We support these interpretations and have no further comments on their text.
D15 Incentives in an operating lease
We support the main principle of this interpretation that incentives and inducements of all kinds associated with entering a lease, should be spread over the periods that benefit from them and not recognised entirely on receipt. In most cases the total lease period will be appropriate. We think, however, that in some cases it would better reflect economic realities if the amortisation were over the period up to the next rent review, or point at which rentals are adjusted to those prevailing in the market. Many such incentives are in effect compensation for initial rentals above market levels.
D16 Presentation of treasury shares
We support this interpretation of the right treatment for the costs of acquisition and of any gain/loss. We agree that preparers should be allowed choices of display of the deduction from equity.