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Arrangement terms: The terms of the arrangement require the operator to: a. Construct a road - completing construction within two years; b. Maintain and operate
Arrangement terms: The terms of the arrangement require the operator to: a. Construct a road - completing construction within two years; b. Maintain and operate the road for three years (i.e., Years 3 to 5). c. Resurface the road when the original surface has deteriorated below a specified condition. The operator estimates that it will have to undertake the resurfacing at the end of Year 4. . The government grants the operator the right to collect toll fees from road users. The operator collects toll fees of P100 per year in Year 3 to 5. . The contract ends in Year 5. The operator determines the fair value of the intangible asset indirectly by reference to the stand-alone selling price of the construction services. The operator makes the following estimates. Year Contract costs Stand-alone selling price Construction services 1 50 Forecast cost + 20% 2 50 Forecast cost + 20% Operation services 3-5 20 N/A Road resurfacing 4 10 N/A
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