This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.

Bookmark Email Print page

iGAAP Alert: December 2008


DOWNLOAD  

iGAAP Alert: December 2008 coverNew Interpretation on non-cash distributions

IFRIC 17 Distributions of Non-cash Assets to Owners provides guidance on the appropriate accounting treatment when an entity distributes assets other than cash as dividends to its shareholders. The specific questions addressed in the Interpretation are:

  • When should the entity recognise the dividend payable?
  • How should the entity measure the dividend payable?
  • When the entity settles the dividend payable, how should it account for any difference between the carrying amount of the assets distributed and the carrying amount of the dividend payable?

The most significant conclusion reached by the IFRIC is that the dividend should be measured at the fair value of the assets distributed, and that any difference between this amount and the previous carrying amount of the assets distributed should be recognised in profit or loss when the entity settles the dividend payable. In the UK this accounting treatment will result in a change in practice from recording non-cash distributions at book value.

Importantly, the Interpretation does not apply to distributions of non-cash assets where the asset is ultimately controlled by the same party or parties before and after the distribution (e.g. distributions of non-cash assets between entities under common control).

The Interpretation has resulted in consequential amendments to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations regarding the appropriate treatment of the non-cash assets held for distribution.

Read the full newsletter below. (PDF format)

Page Last Updated

Share this page

Email this Send to LinkedIn Send to Facebook Tweet this More sharing options
Follow:

Get in touch

More on Deloitte