ASU 2014-05 — Service Concession Arrangements (Topic 853)

The amendments in this Update provide guidance on accounting for service concession arrangements. A service concession arrangement is an arrangement between a public-sector entity grantor and an operating entity under which the operating entity operates the grantor's infrastructure (for example, airports, roads, and bridges).

The amendments in this Update specify that an operating entity should not account for a service concession arrangement within the scope of this Update as a lease in accordance with Topic 840, Leases. The amendments also specify that the infrastructure used in a service concession arrangement should not be recognized as property, plant, and equipment of the operating entity. The amendments apply to an operating entity of a service concession arrangement entered into with a public-sector entity grantor when the grantor controls the services that the operating entity must provide with the infrastructure, and through ownership, any residual interest in the infrastructure at the end of the term of the arrangement.

This Accounting Standards Update is the final version of Proposed Accounting Standards Update EITF-12H—Service Concession Arrangements (Topic 853), which has been deleted.

Issued: January 23, 2014