Service concession (IFRIC 12)

[Feras]

Dear IFRS experts, i would appreciate your insights of a case under the service concession,
keeping in mind that the contract meets all the requirements of a service concession, the operator have to construct a infrastructure and a software system that would run in subsequent years and in return they are granted the right for all the income to cover their cost and then another terms afterwards.
in the current year, where there are only construction expenses, does the operator recognize these expenses as intangible assets? or contract assets? or something else? also are there any accrued revenue to be recognized at this stage? and how it shall be disclosed in the financial statements.

thank you in advance for your support and for the opportunity to have your insights,
much appreciated,

[Ketan Marwah]

Hi,

The operator accounts for construction or upgrade services in accordance with IFRS 15. Refer the following: https://ifrscommunity.com/knowledge-bas ... act-costs/
If the operator provides construction or upgrade services the consideration received or receivable by the operator is recognised at its fair value.
The consideration may be rights to:
1) A financial asset if it has an unconditional right to receive cash or another financial asset. This when the grantor contractually guarantees to pay the operator a specified amounts or the shortfall between amounts received from users and a specified amount.
2) An intangible asset (IAS 38.45-47 provide guidance) if it receives a right (a licence) to charge user for a public service.