Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p61
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 195765–199029

entity. Consequently, only in rare instances would a private sector grantor require specific guidance on the accounting for a service concession arrangement.

     BC8               The Board conducted extensive outreach on the proposals in ED 261, including roundtable discussions in Melbourne, Brisbane and Sydney, field tests in a number of Australian jurisdictions and other targeted outreach.

     BC9               The Board received ten comment letters in response to ED 261. The key responses to ED 261 were:

          (a)                    all respondents were supportive of the proposals set out in ED 261 on the basis that the proposals would provide a consistent approach to the accounting for service concession arrangements from a public sector grantor perspective;

          (b)                   some respondents commented that the proposals were more rule-based than principle-based. These respondents recommended that a principle-based Standard be developed so that the Standard could address emerging innovative service concession arrangements that perhaps a rule-based Standard would not be able to adequately address; and

          (c)                    overall, respondents requested additional guidance and examples on the concept of control, fair value measurement of service concession assets and liabilities, and accounting for the arrangements when transitioning to the Standard.

     BC10            As the Board considered a broad range of issues in developing this Standard following the ED 261 exposure process, numerous issues papers and draft wording for paragraphs of the Standard were published as Board agenda papers. This gave constituents the opportunity to follow the debate and to provide comments on the issues and drafting contemporaneously.

     BC11            In February 2017, the Board also issued a Fatal-Flaw Review version of the Standard for public comment. Submissions were received from seven constituents. The majority of the respondents were supportive of the Board's approach in the Fatal-Flaw Review version. However, some respondents had concerns particularly over the proposed requirement for a grantor to recognise as a service concession asset an intangible asset that the grantor had not been previously recognised and the proposed guidance on public services. Single respondents also objected strongly to (1) the approach to determining the grantor's control or regulation of the pricing of the services of a service concession asset and (2) the proposed requirement to recognise a service concession arrangement that involves the grant of a right to the operator.

     BC12            The Board considered these issues and the comments received at its March and May 2017 meetings. In particular, the Board added additional implementation guidance to illustrate the differences between service concession arrangements and other types of arrangements (construction and service contracts, leases, and sale and privatisation arrangements). The Board also clarified the treatment of previously unrecognised intangible service concession assets and the application guidance regarding public services, for example.

     BC13            The proposed requirements were then finalised in June 2017 in