Document ID: chunk:federal_register_of_legislation:F2023L00010:body:0:p30
Version: federal_register_of_legislation:F2023L00010
Segment Type: other
Provision Reference: 
Character Range: 80129–82870

sector entity not held primarily for its ability to generate net cash inflows, the asset's current use – to provide particular public services – should be presumed to maximise the value of the asset unless evidence exists that, at the measurement date, the appropriate level of management of the entity has committed to a plan to sell (including distribute) the asset or to use the asset for an alternative purpose. The Board considered that a higher and better use than the asset's current use may be identified when the not-for-profit public sector entity has committed to a plan to sell such an asset or to use the asset for an alternative use, because the entity would have determined that the alternative use would generate greater benefits than its current use.
BC50            For an asset subject to a committed-to plan of sale by an appropriate level of management, a conclusion that the asset's highest and best use differs from its current use could be reached earlier than when the asset meets the classification requirement as 'held for sale' under AASB 5. Under paragraphs 6–8 of AASB 5, among other conditions, a non-current asset is classified as held for sale only if the asset is available for immediate sale and its sale must be highly probable. For the sale to be highly probable, the appropriate level of management must be committed to a plan to sell the asset, and an active programme to locate a buyer and complete the plan must have been initiated. In addition, subject to limited exceptions, the sale should be expected to qualify for recognition as a completed sale within one year from the date of classification, and it must be unlikely that significant changes to (or withdrawal of) the plan will occur.
BC51            Under the Board's proposal in ED 320, for an asset subject to a committed-to plan of sale by an appropriate level of management, to conclude that the asset's highest and best use differs from its current use, the entity's appropriate level of management need not have initiated, at the measurement date, an active programme to:
(a)                    locate a buyer; or
(b)                   complete the plan to use the asset for an alternative purpose.

Stakeholder feedback on ED 320 and the Board's redeliberations
BC52            Eleven of the twelve ED respondents to this topic expressed support for modifying AASB 13 to limit the circumstances in which the current use presumption would be rebutted. The respondent who disagreed with any modification to AASB 13 that would constrain identifying a higher and better alternative use of an asset considered that the hypothetical transaction underpinning the fair value concept in AASB 13 should be supported by actual market activity or