Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p3
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
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Character Range: 5949–8890

32; and

     (f)                    IPSAS 32 includes additional application guidance for other revenues. Other revenues relate to compensation by the operator to the grantor for access to the service concession asset by providing the grantor with a series of predetermined inflows of resources such as an upfront payment or a stream of payments (eg rent payments) and revenue-sharing provisions.

AASB 1059 and IFRS Standards
Public sector entities, including for-profit entities, that comply with AASB 1059 may not be in compliance with International Financial Reporting Standards issued by the International Accounting Standards Board (IASB). The IASB has issued an IFRIC Interpretation addressing the accounting by private sector operators of service concession arrangements but has not issued a pronouncement regarding the accounting by grantors.
AASB 1059 requires a grantor to initially measure a service concession asset at current replacement cost in accordance with the cost approach to fair value in AASB 13. However, AASB 13 and the corresponding IFRS 13 Fair Value Measurement do not specify which valuation technique to use. Instead IFRS 13 requires the use of 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. Three widely used valuation techniques set out in IFRS 13 are the market approach, the cost approach and the income approach. The requirement of AASB 1059 to initially measure a service concession asset at current replacement cost in accordance with the cost approach may not be compliant with IFRS 13.
AASB 1059 requires a grantor to recognise an identifiable intangible asset as a service concession asset where the grantor controls the asset as set out in paragraph 5 or 6, even if the asset does not qualify for recognition under AASB 138/IAS 38 Intangible Assets. This Standard also permits revaluation of the asset in the absence of an active market.
AASB 15 Revenue from Contracts with Customers requires a licensor of intellectual property to recognise revenue from granting the licence using either the right-to-use or right-to-access methods, depending on the specific facts and circumstances. The general requirement in AASB 1059 to recognise revenue from granting a right to the operator over the term of the service concession arrangement on an appropriate basis may not be compliant with IFRS 15 Revenue from Contracts with Customers.
Consequently, a public sector grantor that is a for-profit entity may not be able to state that its financial statements comply with IFRS Standards.

Accounting Standard AASB 1059

The Australian Accounting Standards Board made Accounting Standard AASB 1059 Service Concession Arrangements: Grantors under section 334 of the Corporations Act 2001 on 14 July 2017.

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