Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p73
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 228599–231570

right to charge users, this could result in a different fair value compared to that for an equivalent asset without such a characteristic, such as the service concession asset under an arrangement that involves only the financial liability model. In the latter case, any obligation to pay the operator under the financial liability model that would be transferred to the market participant would be separately recognised, not netted against the asset.

     BC51            The Board discussed the unit of account in AASB 13, which defines it as the level at which an asset or a liability is aggregated or disaggregated in a Standard for recognition purposes. The Board noted there are three possible bases for identifying a service concession asset: the service concession period, the economic life after the end of the arrangement (the residual), or both the concession period and any remaining economic life.

     BC52            The Board noted some may view the grant of a right to the operator to earn revenue from third-party users of the asset means that the grantor's service concession asset is only the residual interest in the asset after the service concession period. Under this view, the grantor's interest in the service concession period component of the asset is effectively derecognised, consistent with a rights and obligations approach.

     BC53            In the development of IFRIC 12, the IFRIC decided that when the operator in a service concession arrangement does not have the right to control the underlying use of the asset, the operator instead has access to operate the asset to provide a service on behalf of the grantor. In essence, the operator acts as a service provider (IFRIC 12, paragraphs BC24–BC25). Accordingly, it is the grantor that has control of the underlying use of the asset during both the service concession period and any residual period thereafter. The Board therefore concluded the unit of account is the entire service concession asset, not just the residual interest after the service concession arrangement ends.

Valuation techniques for measuring fair value
     BC54            AASB 13 outlines three 'widely used' valuation techniques for measuring fair value (paragraph 62): the market approach, the income approach and the cost approach. AASB 13 does not specify which valuation technique is more appropriate. Instead, AASB 13 states that:

(a)                    an entity uses the valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs;
(b)                                 the inputs selected should be consistent with the characteristics of the asset or liability that market participants would take into account in a transaction for the asset or liability; and
(c)                                 the fair value hierarchy (Level 1,