Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p72
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 226070–228848

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 the asset
     BC48            In considering the characteristics of the asset when measuring fair value, the Board noted AASB 13 requires the grantor to consider the characteristics of the service concession asset that market participants would take into account when pricing the asset at the measurement date. Characteristics include the condition and location of the asset as well as any restrictions on the sale, transfer or use of the asset. The effect of restrictions on the sale, transfer or use of the service concession asset depends on whether the restriction is deemed to be a characteristic of the asset or a characteristic of the grantor that controls the asset. Where a restriction would transfer with the asset in an assumed sale or transfer, the restriction would generally be regarded as a characteristic of the asset and likely to be considered by a market participant in pricing the asset. On the other hand, a restriction that is specific to the grantor and that would not transfer with the asset in an assumed sale would not be considered in measuring the fair value of the asset. Whether a restriction is a characteristic of the service concession asset or specific to the grantor requires judgement based on the specific facts and circumstances of the arrangement.

     BC49            A market participant may consider that the right of access provided by the grantor to the operator does not represent a restriction on the grantor's use of the asset. In a service concession arrangement, control of the asset and therefore the right to use the asset is retained by the grantor (and transferred to the market participant in a hypothetical transaction). Under this view, the right of access provided to the operator would not represent a restriction on the use of the asset.

     BC50            The assessment of restrictions is important for service concession arrangements involving the grant of a right to the operator (GORTO) model, where the grantor provides the operator with a right to charge the users of the service concession asset. To the extent that a market participant (acting in its economic best interest) would take into account in measuring the fair value of the asset the fact that a third-party operator has been granted a 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