Deloitte Touche Tohmatsu
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United Kingdom
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www.iasplus.com
12 October 2007
Robert Garnett
Chairman
International Financial Reporting Interpretations Committee
30 Cannon Street
London EC4M 6XH
commentletters@iasb.org
Dear Bob,
IFRIC Draft Interpretation D21 Real Estate Sales
Deloitte Touche Tohmatsu is pleased to comment on the International Financial Reporting
Interpretations Committee’s (the IFRIC’s) Draft Interpretation D21 Real Estate Sales
(referred to as the Draft Interpretation).
Whilst we support the IFRIC’s efforts to provide clarification for transactions in which
agreements for sale of real estate are reached before the construction is complete, we do not
support the consensus as proposed in the Draft Interpretation as it does not clearly articulate
the underlying principles and logic to distinguish a contract for the delivery of goods from
that for the delivery of construction services. To assist the IFRIC in their re-deliberations of
the Draft Interpretation we have articulated what we see as the relevant principles in
Appendix A to this letter. The Appendix suggests some indicators to assist in distinguishing
the characteristics of the delivery of goods from those of construction services. In our view,
whether a contract is for the delivery of goods or for the provision of construction services is
a spectrum in which judgement will need to be exercised in order to determine how a contract
should be classified.
In Appendix B to this letter we have also highlighted some specific concerns in relation to the
Draft Interpretation as it is currently drafted. We also note that a number of aspects of the
Draft Interpretation are not clear and would benefit from modifications to the wording or the
inclusion of additional guidance. We have provided detailed comments on each of these
issu