IAS 18 - Guidance on Identifying Agency Arrangements
Current status:
In September 2007 the IFRIC agreed to remove this project from its agenda. In doing so, the IFRIC also decided to recommend to the Board that guidance be included in the Appendix to IAS 18 to help constituents to determine whether an entity is acting as a principal or as an agent. The issue is now being considered as part of the Annual Improvements Process.
Summary of the issue:
IAS 18.8 states that “in an agency relationship, the gross inflows of economic benefits include amounts collected on behalf of the principal and which do not result in increases in equity for the entity. The amounts collected on behalf of the principal are not revenue. Instead revenue is the amount of commission.”
IAS 18 does not include detailed guidance on how to identify when an entity is acting as an agent in an agency arrangement.
At its July 2006 meeting, the IFRIC agreed to take on a project to develop guidance on how to identify whether an entity is acting as an agent in a selling arrangement and so should recognise revenue net.
In taking the issue onto its agenda, the IFRIC asked the staff to give the project a lower priority than the other projects which they were currently undertaking.
Latest progress on the issue:
In taking this issue off its agenda, the IFRIC asked the staff to recommend to the Board that guidance be included in the Appendix to IAS 18 to help constituents to determine whether an entity is acting as a principal or as an agent. The staff will present a paper to the Board considering this issue as part of the Annual Improvements Process
Discussed by the IFRIC:
Discussed by the IASB :
Staff contact: