Basis for Conclusions on SIC-29 (INT129_08-15_COMPdec21_01-22)

Paragraph 15 of the Framework for the Preparation and Presentation of Financial Statements^[1] states that the economic decisions taken by users of financial statements require an evaluation of the ability of the entity to generate cash and cash equivalents and of the timing and certainty of their generation. Paragraph 21 of the Framework^[1] states that financial statements also contain notes and supplementary schedules and other information. For example, they may contain additional information that is relevant to the needs of users about the items in the statement of financial position balance sheet and statement of comprehensive income statement. They may also include disclosures about the risks and uncertainties affecting the entity and any resources and obligations not recognised in the statement of financial position balance sheet.

A service concession arrangement often has provisions or significant features that warrant disclosure of information necessary to assist in assessing the amount, timing and certainty of future cash flows, and the nature and extent of the various rights and obligations involved. The rights and obligations associated with the services to be provided usually involve a high level of public involvement (eg to provide electricity to a city). Other obligations could include significant acts such as building an infrastructure asset (eg power plant) and delivering that asset to the Concession Provider grantor at the end of the concession period.

The text of paragraph 10 has been marked up to reflect the revision of IAS 1 in 2007. Previous amendments to the paragraph, reflecting the revision of IAS 1 in 2003, have been incorporated into the text to avoid confusion with the new amendments in 2007.

IAS 1.112(c)103(c) requires an entity’s notes to provide additional information that is not presented elsewhere in the financial statements on the face of the balance sheet, income statement, statement of changes in equity or cash flow statement, but is relevant to an understanding of any of them. The definition of notes in IAS 1.711 indicates that notes provide narrative descriptions or disaggregations of items disclosed in the statement of financial position balance sheet, statement of comprehensive income, separate income statement (if presented), statement of changes in equity and statement of cash flows statement, as well as information about items that do not qualify for recognition in those statements.