Private-public service arrangement: Is it a service concession?

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Every Tuesday in April, Pat Durbin took over the podcast to share insights and go back to basics on some critical accounting areas, including contingent liabilities, subsequent events, and inventory.

In this episode, Heather Horn and Pat are joined by Jay Seliber to discuss identifying whether a service arrangement with a public-sector grantor would be in scope of ASC 853 on service concessions. They cover the accounting challenges that are associated with private-sector enterprises operating public infrastructure.

In this episode, you’ll hear discussion of:

• 1:54 - What a service concession is, and who and what is in scope of the ASC 853 guidance 
• 14:22 - Common types of private-public service arrangements 
• 18:30 - How to think about applying the revenue recognition model to these arrangements and challenges when there are multiple performance obligations and variable fees 
• 32:24 - How to recognize different types of expenses under the guidance 
• 39:25 - The development of the US GAAP guidance and a comparison to IFRS
• 45:03 - Final advice when accounting for service concessions 

For more information, read the service concessions chapter in both our revenue recognition guide and our IFRS and US GAAP: similarities and differences guide. Additionally, listen to our revenue toolkit podcast miniseries.

Pat Durbin is a Deputy Chief Accountant in PwC’s National Office. He has over 30 years of experience consulting with our clients and engagement teams on complex accounting matters, including issues related to revenue, compensation, income taxes, and inventory under both US GAAP and IFRS.

Jay Seliber is a partner in PwC’s National Office. He leverages over 30 years of experience to help clients with their most complex accounting matters, particularly in the areas of mergers and acquisitions, revenue recognition, stock compensation, earnings per share, employee benefits, restructurings, impairments, and financing transactions. Jay is presently PwC's representative on the FASB's Emerging Issues Task Force.

Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].