Service concession arrangements (para. BC69)

(paragraphs 3-4)

BC69 The IASB decided to exclude from the scope of IFRS 16 service concession arrangements within the scope of IFRIC 12. Consistently with the conclusions in IFRIC 12, any arrangement within its scope (ie that meets the conditions in paragraph 5 of the Interpretation) does not meet the definition of a lease. This is because the operator in a service concession arrangement does not have the right to control the use of the underlying asset. For this reason, the IASB considered whether it was necessary to explicitly exclude from the scope of IFRS 16 service concession arrangements within the scope of IFRIC 12. However, such a scope exclusion had been included in IFRIC 4 Determining whether an Arrangement contains a Lease, and stakeholders informed the IASB that including a scope exclusion for service concession arrangements in IFRS 16 would provide clarity in this respect.