Theoretical framework on Public Private Partnership and Service Concession Arrangement, before and after

The "contributions for financed investments " and its " financed investment costs ", found in application of IFRIC 12, amount to 103.459 million euros.

Important events that occurred after September 30, 2012. On 1 October was signed the new contract for the management of local public rail transport between Trenord and Regione Lombardia into effect on January 1, 2012 and deadline on December 31, 2014.

The shareholders meeting of Trenord, held on October 26, 2012, decided to amend article 3 of the bylaw, introducing the following second paragraph "the company may also take equity in the company Gruppo Torinese Trasporti S.p.A.". The Assembly then decided to authorize, pursuant to article 10, paragraph 5, c) of the Statute, a "preliminary and non-binding" and therefore revocable at any time, for the purchase of participation equal to 49% in the social capital of Gruppo Torinese Trasporti S.p.A..

Consolidation principles and evaluation criteria applied are similar to those used for the preparation of the consolidated financial statements on December 31, 2008, except for the early application of the interpretation IFRIC 12 – Service Concession Arrangements, (published by the IFRIC on November 30, 2006 and approved on March 25, 2009 with Regulation No 254 of the EU Commission). SIAS group application of IFRIC 12 will be mandatory from 1st January 2010; However, having completed in 2009 – the process of renewal of the conventions for the concessionary companies in the group, the company-in the presence of a reference defined framework – it felt more appropriate to apply this interpretation with effect from 2009. The consolidated financial statements include, in addition to the budget of the SIAS, the balance sheets of companies over which it exercises control properly adjusted/reclassified in order to make them compatible with the editorial norms laid down by the international accounting standards IAS/IFRS. Control exists when the Group-directly or indirectly- holds more than 50% of the voting rights or has the power to determine the financial and operating policies of the company. The financial statements of subsidiaries are included in the consolidated financial statements with effect from the date on which it takes control until the moment in which such control ceases to exist. The companies, that are controlled in conjunction with third party partners and on the basis of agreements with them, were consolidated by the proportional method, while those over which a "significant influence" on the financial and operating policies is exercised, were evaluated with the "equity method". It should be noted, moreover, that the subsidiary RITES S.C.A.R.L. was evaluated with the "equity method" as not relevant. Its consolidation would not have produced significant effect on the consolidated financial statements.

- an intangible asset when from the construction of the asset the concessionaire/operator draws the right to exploit the work in relation to third parties, acquiring the right to charge users of the public service,

The concessionaire/operator that is required to apply IFRIC 12 shall recognise in the income statement, on the one hand, the construction cost and, secondly, the amount that is determined by reference to the relative fair values of the services delivered, already incorporating an estimated contract margin. In this regard, it should be firstly noted that, by virtue of the principle of reinforced derivation art. 83 of the Tax Code, in the version in force since 2008. qualifications, charges, classifications of financial statements arising from the adoption of IFRIC 12 find direct recognition from the point of view of taxation. In particular, subsequent to the recognition of the intangible asset it will become applicable the discipline under the art. 103, paragraph 2 of the Tax Code, which, with reference to the cost of the concession rights and other rights recognized in the balance sheet provides that the accumulated depreciation charges are deductible in proportion to duration of the use specified in the contract or by law. Some doubts arise with regard to the possibility of using the so-called sinking fund provisions according to the art. 104 of the Tax Code, which allows the deduction of variable depreciation charges in lieu of ordinary depreciation.

There are, however, no good reason to exclude the application of this discipline in the case of IAS adopter entities, provided that the same art. 104, paragraph 1 of the Tax Code provides that this type of depreciation is allowed in a planned ordinary depreciation for both physical assets and intangible assets. Another problem of a fiscal nature in respect of operations of replacement and restoration that, according to IFRIC 12, must be calculated pro rata basis taking into account the time of maturation of the bond and its deferral in time: this involves the necessity to account, in each year, a special fund, based on its current value. With reference to the above provisions, it is believed that the art. 107, paragraph 2 of the Tax Code can be applied, it allows the deduction within the limit of 5% of the cost of each item, and up to the total amount of expenses incurred for each item in the last two years. A number of systematic reasons, lead to the conclusion that it can not be accepted the argument of those who believe that the under discussion provisions concern the constructed item which does not appear in the financial statements of companies IAS adopters. Other themes of interest regard the improvements to be borne by the concessionaire without the recognition of tariff increases.

It may happen, in fact, that the concession agreements require the concessionaire the construction of real additions or additional works without additional economic benefits. In this case, according to the interpretative guidance of the OIC, the accounting practice is to be preferred to enrol at the time of incurrence of such liabilities the present value of future liabilities in return for a corresponding increase in intangible asset, which is thus subjected immediately to the amortization procedure, in full respect of the principle of correlation with revenues. This system is not dissimilar to the one provided for the costs of remediation and environmental restoration, for which the explanatory report on the Ministerial Decree of 1st April 2009 stated that the accounting rules of IAS express a qualification designed to find direct tax recognition. Therefore, it seems logical to assume that the costs for improvements to be borne by the concessionaire, capitalized on the value of the intangible asset, conform to the same treatment as the cost of remediation and environmental restoration.

IFRIC 12, although addressed to the concessionaires/operators, then to private sector entities, however, is of fundamental importance for scholars of public enterprises and public management, as the same definitional framework, stressing the principle of substance over form, highlights a central need for further reflection on some issues and some key concepts, such as:

- The boundaries for public and private entities;
- The identification and allocation of risk;
- Infrastructure;
- Public utilities, public interest services and / or benefits;
- Major economic and social;
- Price/value of the services;

The interpretative usefulness of IFRIC 12 is essential in order to avoid confusion in the activity of classification, measurement and recognition of ASCs involving public sector entities and private sector entities, such as outsourcing contracts, contracts of network capacity, take-or-pay agreements, all regulated instead by IFRIC 4 (Laghi 2010: 6), or even errors in the PPP framework, where the prevalence of economic substance is entirely public, as in the selected case study, and then having reference to the discipline of IAS 20 .

Among other positive aspects of IFRIC 12, there is an attempt to improve the financial reporting for investors, clarifying the nature and risks underlying the ASCs subject to measurement, recognition and assessment.
However, several authors in the literature reveal that the centrality of the interpretative complexity is an effect and not just source of greater needs of public finance (Laghi, 2010).

In fact, the entry or cancellation of balance sheet assets, are sometimes linked and based on the "transfer risk / benefit" model, sometimes they are linked to the prevalence of the activity "control" model (Laghi, 2010; Martiniello, 2011; Head, Georgiou, 2011), this circumstance generates an undoubted complexity of interpretation. Such a complexity comes back as in a mirror (Head, Georgiou, 2011), when assessing the adoption of IFRIC 12 with respect to the choice of evaluation based on the "control" model (control model), or to the "risk / benefit " model (risk and renard model), or to the new information provided by institutions such as the UTFP related to the principle of incurring the construction and management costs (Martiniello, 2011).

Dickinson, H. and Glasby, J. (2010) ‘Why partnership working doesn't work’: Pitfalls, problems and possibilities in English health and social care, Public Management Review, 12: 811 – 828