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Handbook: Service concession arrangements

Handbooks | June 2024

Our in-depth guide to the accounting requirements of ASC 853. 

Using detailed Q&As, interpretive guidance and examples for common practice issues, our in-depth guide explains the accounting for service concession arrangements under ASC 853 and ASC 606.


ASC 853 and ASC 606                 

  • Operators in service concession arrangements

Relevant dates

  • Effective immediately

Key impacts

Arrangements to provide services to a government or public sector entity are as varied as the services the government provides to the public. ASC 853, Service Concession Arrangements, provides only limited guidance on the accounting for service concession arrangements – which means that the appropriate accounting for some arrangements with the government can be especially challenging.

A service concession arrangement is between a government or public sector entity (grantor) and a private sector entity (operator) where the operator operates the grantor’s infrastructure (e.g. airports, toll roads, bridges, tunnels, prisons and hospitals) for a period of time. The operator may receive payments from the grantor to perform the public service, or from the public directly as a result of using the services.

These unique arrangements have terms that make determining the appropriate revenue recognition challenging. Through Q&As and examples, this Handbook takes you through the necessary steps to determine if an arrangement falls within the guidance of ASC 853 and, if so, the application of the principles of ASC 606, Revenue Recognition.

Report contents

  • Scope
  • Step 1: Identify the contract with the customer
  • Step 2: Identify the performance obligations
  • Step 3: Determine the transaction price
  • Step 4: Allocate the transaction price
  • Step 5: Recognize revenue
  • Long-lived assets
  • Presentation and disclosure

Download the document:

Service concession arrangements

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Mike Breen
Partner, Department of Professional Practice, KPMG US
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Meredith Canady
Partner, Dept. of Professional Practice, KPMG US

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