Non-monetary assets contributed by venturers are similar when they have a similar nature, a similar use in the same line of business and a similar fair value. A contribution meets the similarity test only if all significant component assets included in the contribution are similar to each of the significant component assets contributed by the other venturers. A gain should also be recognised if, in addition to the equity interest in the jointly controlled entity, the venturer receives consideration in the form of either cash or other assets which are dissimilar to the non-monetary assets contributed. This Interpretation addresses how an enterprise should account for impairments or losses of items of property, plant and equipment, the related compensation from third parties, and the subsequent restoration, purchase or construction of assets. The Interpretation confirms that three separate economic events are involved and that each event should be accounted for separately.
Compensation is to be included in the income statement when recognised.
Recognising the compensation as deferred income or deducting it from the impairment or loss or from the cost of a new asset is not appropriate. In SIC-15, the SIC clarifies the recognition of incentives related to operating leases by both the lessee and lessor. As they are an integral part of the net consideration agreed for the use of the leased asset, incentives should be recognised by both the lessor and the lessee over the lease term, with each party using a single amortisation method applied to the net consideration.