Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p94
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 286017–289045

under roads, and to exclude goodwill; and

         (f)                    provides guidance on the term 'public service' that is not in IPSAS 32.

Transition
     BC122        This Standard modifies the transition approach of IPSAS 32 to require any net adjustment on transition to be included as an adjustment to the opening balance of accumulated surplus (deficiency) at the date of initial application. IPSAS 32 requires a relevant adjustment to be included in revaluation surplus when the revaluation model is applied. Unlike IPSAS 32, this Standard also permits a grantor that has previously recognised service concession assets and related liabilities to apply the Standard retrospectively in accordance with the modified retrospective approach.

Illustrative examples
     BC123        This Standard includes some differences in the illustrative examples based on those in IPSAS 32, such as:

(a)                    the examples of the financial liability model (Example 6) and the grant of a right to the operator model (Example 7) both include a funding cost in the measurement of the service concession asset at fair value (current replacement cost), whereas the corresponding IPSAS 32 examples do not. Consequently, Examples 6 and 7 in this Standard both show the service concession asset and the liability measured initially at the same amount, which is not the case for the financial liability example (Example 1) in IPSAS 32; and

(b)                   in Example 7, no revenue is recognised by the grantor in relation to the replacement of a major component of the service concession asset until the replacement occurs. The corresponding IPSAS 32 example (Example 2) allocates all revenue evenly over the term of the service concession arrangement.

     The Standard also includes additional implementation guidance examples to illustrate the differences between service concession arrangements and other types of arrangements.

Comparison with IFRS Standards
     BC124        Entities that comply with this Standard may not be in compliance with IFRS Standards issued by the IASB. The IASB has issued IFRIC Interpretation 12 addressing the accounting by operators of public-to-private service concession arrangements but has not issued a pronouncement regarding the accounting by grantors. The following paragraphs set out requirements in this Standard for the accounting by grantors that may not be compliant with IFRS Standards. A grantor that is a for-profit entity would not be able to state that its financial statements comply with IFRS Standards if it applies requirements that are not compliant with IFRS Standards.

     BC125        This Standard requires a grantor to initially measure a service concession asset at current replacement cost in accordance with the cost approach to fair value in AASB 13. However, AASB 13 and the corresponding IFRS 13 do not specify which valuation technique to use. Instead IFRS 13 requires the use of valuation techniques that are appropriate in the circumstances