Document ID: chunk:federal_register_of_legislation:F2023L00010:body:0:p39
Version: federal_register_of_legislation:F2023L00010
Segment Type: other
Provision Reference: 
Character Range: 104997–107925

be recognised (ie until transferred), the not-for-profit public sector entity is not required to consider whether the asset's highest and best use differs from its current use unless all conditions in paragraph Aus29.2 are met.
BC75            Another stakeholder requested the Board to clarify whether an entity is required to assess whether an asset's current use remains its highest and best use if the asset will be transferred to another entity in the same government and will be used for the same purpose as its current use, such as in a machinery of government transfer. The Board considered that, in the situation described by the stakeholder, an entity may determine that the asset's current use remains its highest and best use until the asset is transferred, which would occur if one or more conditions in paragraph Aus29.2 have not been met (eg if cessation of the asset's current use within one year of the measurement date is not (based on reasonably available information) highly probable and, therefore, paragraph Aus29.2(d) has not been met).

Other observation
BC76            The Board observed that paragraphs Aus29.1 and Aus29.2 provide guidance on conditions that must be met to potentially conclude that, regarding paragraph 29 of AASB 13, factors suggest that a different use by market participants (including other not-for-profit public sector entities) would maximise the value of the asset. However, meeting the conditions in paragraphs Aus29.1 and Aus29.2 for needing to consider whether an asset's highest and best use differs from its current use would not necessarily indicate that the asset's highest and best use differs from its current use (although such a conclusion would typically be reached). Once an asset meets the applicable conditions in paragraphs Aus29.1 and Aus29.2, the entity reassesses the asset's highest and best use – the outcome of which will depend on the facts and circumstances.

Appropriate level of management
BC77            Due to the unique characteristics of decision-making structures in the public sector, some stakeholders requested the Board to provide guidance on who might be the appropriate level of management of an entity for the purposes of applying paragraph Aus29.2(b). The Board considered that an entity needs to apply judgement in determining the appropriate level of management, which will depend on the facts and circumstances of individual assets. In this context, the appropriate level of management might depend on, for example, the asset's significance, the requirements (legislative and policy) and conventions for decision making in the public sector, and the resulting governance structure affecting the not-for-profit public sector entity.
BC78            The Board observed that typical examples of the appropriate level of management of an entity holding an asset not primarily for its ability to generate net cash inflows would include a