Scope

2

This Interpretation addresses the accounting for a liability to pay a levy if that liability is within the scope of AASB 137. It also addresses the accounting for a liability to pay a levy whose timing and amount is certain.

3

This Interpretation does not address the accounting for the costs that arise from recognising a liability to pay a levy. Entities should apply other Standards to decide whether the recognition of a liability to pay a levy gives rise to an asset or an expense.

4

For the purposes of this Interpretation, a levy is an outflow of resources embodying economic benefits that is imposed by governments on entities in accordance with legislation (ie laws and/or regulations), other than:

(a)            those outflows of resources that are within the scope of other Standards (such as income taxes that are within the scope of AASB 112 Income Taxes); and

(b)            fines or other penalties that are imposed for breaches of the legislation.

‘Government’ refers to government, government agencies and similar bodies whether local, national or international.

5

A payment made by an entity for the acquisition of an asset, or for the rendering of services under a contractual agreement with a government, does not meet the definition of a levy.

6

An entity is not required to apply this Interpretation to liabilities that arise from emissions trading schemes.