Document ID: chunk:federal_register_of_legislation:F2024C00046:body:0:p77
Version: federal_register_of_legislation:F2024C00046
Segment Type: other
Provision Reference: 
Character Range: 201703–204692

inputs;
(b)                   any specific criteria for determining when market or other factors suggest that an alternative use of an asset by market participants would be the asset's highest and best use. Consequently, the modification of AASB 13 in paragraphs Aus29.1 and Aus29.2 – specifying that an entity is required to consider whether the asset's highest and best use differs from its current use only when, at the measurement date, it is classified as held for sale or held for distribution to owners in accordance with AASB 5 or it is highly probable that the asset will be used for an alternative purpose to its current use – creates the potential for particular fair value measurements to be non-compliant with IFRS 13. This is because applying paragraphs Aus29.1 and Aus29.2 might delay the identification of a higher and better alternative use compared with application of paragraph 29 of IFRS 13 alone. The Board concluded such potential for non-compliance with IFRS 13 is warranted by the unique aspects of the processes in the public sector for selling, distributing to owners or redeploying assets (see paragraphs BC52–BC59);
(c)                    that the capability of the asset to be used to provide needed goods or services and the resulting cost of those goods or services need to be considered (instead of whether a use of the asset would generate an investment return on that asset) when considering whether a use of an asset is financially feasible (see paragraphs BC82–BC88); and
(d)                   how the cost approach should be applied, beyond the brief requirements in IFRS 13 paragraphs B8 and B9.
The requirements of this Standard noted in paragraphs BC37 and BC38 might not comply with IFRS 13.
BC39            The Board made reference to paragraphs 25 and 30 of the AASB Not-for-Profit Entity Standard-Setting Framework, which state that, when justified, the Board would modify IFRS Standards to address not-for-profit specific issues, including those involving:
(a)                    undue widespread and significant diversity in accounting practices (see paragraph 25(g)); and
(b)                   cost or effort of preparing and disclosing information that outweighs the benefits to users (see paragraph 30(h)).
BC40            As mentioned in paragraphs BC7 and BC8, many public sector stakeholders commented that applying AASB 13 had been challenging and costly and that the measurement issues are pervasive in the not-for-profit public sector and involve inconsistent practical application of the principles of AASB 13. Accordingly, the Board undertook the FVM project to provide guidance that:
(a)                    assists the not-for-profit public sector to apply the principles of AASB 13 more consistently; and
(b)                   enables the application of AASB 13 in a more cost-effective manner by clarifying its application, including clarifying the extent to which preparers of financial statements need to search for information