Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p71
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 223427–226329

service concession assets. The Board concluded that the approach in AASB 3 would be difficult to apply in practice, with the costs likely to outweigh the benefits. Consequently, the Board decided not to apply the approach in AASB 3. Instead, the grantor is required by AASB 1059 to recognise only the tangible assets and intangible assets in the business, measured at fair value (current replacement cost) and liabilities of the business. Goodwill is not permitted to be recognised.

     BC44            The Board considered that at the end of a service concession arrangement an intangible service concession asset should continue to be recognised as an intangible asset and accounted for in accordance with AASB 138, excluding the recognition criteria of AASB 138. The Board decided that AASB 1059 would override the recognition criteria of AASB 138, so that an intangible asset would not be derecognised at the end of the service concession arrangement merely because it could not satisfy the recognition requirements of AASB 138. However, the derecognition criteria in AASB 138 would apply, so that the grantor would be required to derecognise the intangible asset if the grantor loses control of the asset.

Land under roads
     BC45            The Board noted that a service concession arrangement might involve land under roads. AASB 1051 Land Under Roads requires land under roads to be recognised as an asset only by local governments, government departments, General Government Sectors and whole of governments, and only in respect of land under roads acquired after the end of the first reporting period that ended on or after 31 December 2007. AASB 1051 notes that AASB 116 applies to land under roads when recognised. The Board concluded that, to be consistent with the requirement in this Standard for a grantor to recognise previously unrecognised identifiable intangible assets that are controlled by the grantor as service concession assets, grantors would also be required to recognise land under roads as service concession assets when the control criteria in paragraphs 5 or 6 were satisfied. The Board decided that this requirement would apply to all grantors, not just grantors that were subject to AASB 1051.

Measurement of service concession assets
     BC46            The Standard addresses subsequent measurement of service concession assets by reference to AASB 116 and AASB 138, on the grounds that service concession arrangements relating to other types of assets are unlikely. That does not prevent application of this Standard to other types of assets included within a service concession arrangement.

     BC47            The Board considered the measurement of a service concession asset at fair value in accordance with AASB 13 in relation to the characteristics of the asset and valuation techniques for measuring the fair value of the asset.

Characteristics of