Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p63
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 201586–204702

policy that compliance with Australian Accounting Standards by for-profit entities would result in compliance with IFRS Standards. The Board noted this approach would reduce or eliminate any incentive for structuring service concession arrangements through for-profit public sector grantors.

Terminology
     BC17            IPSAS 32 is expressed in jurisdiction-neutral language. The Board considered that some of the terminology in IPSAS 32 does not readily translate to the Australian environment and decided that different terms and phrases would be appropriate for entities applying Australian Accounting Standards. For example, consistent with the terminology used in other Australian Accounting Standards, the Standard adopts the term 'contract' rather than the term 'binding arrangement', and the Standard refers to operator 'access' rather than 'use' as in the definitions of a 'grantor' and an 'operator' in IPSAS 32.

     BC18            ED 261 proposed defining the term 'public service' as "A service that is provided by government or one of its controlled entities, as part of the usual government function, to the community, either directly (through the public sector) or by financing the provision of services". Constituents in their feedback on ED 261 stated that although they supported the inclusion of a 'public service' definition, the proposed definition was unclear. The Board concluded that any definition of 'public service' would result in similar interpretative issues as those raised by constituents in relation to the definition proposed in ED 261. The Board therefore decided, instead of providing a definition, the Standard should include guidance on 'public service' for assessing whether an arrangement is within the scope of the Standard. The Board also noted this approach is consistent with IPSAS 32 and AASB Interpretation 12, which do not contain a definition of 'public service'. The Board decided that the guidance should be in the form of examples and features to be considered, such as:

          (a)                    an operator must be responsible for at least some of the management of the service concession asset and related services, and not act merely as an agent of the grantor; and

          (b)                   services that are insignificant to the arrangement as a whole may be ancillary services.

    BC19      The Board also decided to amend the 'service concession asset' definition (as proposed in ED 261) so that it refers to an asset accessed by the operator to provide public services on behalf of the grantor, for consistency with the public service guidance.

Recognition of service concession assets

Control
     BC20            The Board considered a number of alternative approaches in developing the proposed guidance for assessing whether a grantor controls the service concession asset, including:

(a)                    the risks and rewards approach;

(b)                   the rights and obligations approach;

(c)                    the control or regulation approach (the IPSAS 32 concept of control); and

(d)                   an