Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p90
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 274790–277817

date of initial application, and then adjust that measure to reflect that part of the term of the service concession arrangement has passed. There were different views as to how to make that adjustment. The Board concluded that the adjustment should reflect the remaining service concession period relative to the remaining economic life of the service concession asset, on the grounds that the current measurement of the asset represented the future benefits inherent in the asset. The Board decided to include an example to illustrate the adjustment required.

     BC107        The Standard requires that any net adjustment to the carrying amounts of assets and liabilities is recognised as an adjustment to the opening balance of accumulated surplus (deficiency) at the date of initial application. Accordingly, the Standard requires that if the grantor elects as its accounting policy the revaluation model in AASB 116 or AASB 138 (or is required to adopt that policy), any relevant adjustment is included in accumulated surplus (deficiency) and not revaluation surplus. The Board noted that the amount of such an adjustment could not be used to offset future changes in the values of an asset or liability. This is consistent with the treatment in AASB 108 for a change in accounting policy. However, this differs from the approach permitted by IPSAS 32, where such an adjustment would be included in revaluation surplus.

Effective date
     BC108        The Board noted that ED 261 had proposed an effective date of annual reporting periods beginning on or after 1 January 2017, which was no longer feasible. The Board decided the effective date of the Standard should be annual reporting periods beginning on or after 1 January 2019, on the basis that that date would:

          (a)                    effectively provide two years, from the issue date, for implementing the Standard for entities that have a 30 June reporting date. This aligns with constituents' comments that this Standard will need a significant amount of time to implement; and

          (b)                   align with the effective date of AASB 15 and AASB 1058 Income of Not-for-Profit Entities, which this Standard cross-references (see paragraph 27). Although the effective date of this Standard need not align with those Standards, the Board considered having the same effective date would assist grantors in the overall implementation of the Standards.

GAAP/GFS convergence
     BC109        The Board discussed implications of its decisions on GAAP/GFS harmonisation. The Board noted that key differences between Generally Accepted Accounting Principles (GAAP) and Government Finance Statistics (GFS) may arise in relation to the following:

          (a)                    service concession arrangement terminology – GFS refers to such arrangements as 'Public Private Partnerships' (PPP);

          (b)                   assessment of whether the grantor recognises a service concession asset – assessment is based on the risks and