Document ID: chunk:federal_register_of_legislation:F2023L00010:body:0:p19
Version: federal_register_of_legislation:F2023L00010
Segment Type: other
Provision Reference: 
Character Range: 50159–53195

The Board decided to undertake a narrow-scope project to give relief from certain AASB 13 disclosures, limited to items of property, plant and equipment within the scope of AASB 116 Property, Plant and Equipment that are held primarily for their current service capacity rather than primarily to generate future net cash inflows, in relation to disclosure of quantitative and qualitative information about the significant unobservable inputs used in the fair value measurement of such assets. This project resulted in AASB 2015-7 Amendments to Australian Accounting Standards – Fair Value Disclosures of Not-for-Profit Public Sector Entities.
BC6               During the due process of developing AASB 2015-7 and consideration of Invitation to Comment ITC 34 AASB Agenda Consultation 2017–2019 (in which the Board sought views on its priorities for its work program for the period 2017–2019), some stakeholders in the public sector asked the Board to provide guidance clarifying how to apply the requirements in AASB 13 to the fair value measurement of public sector entity assets.
BC7               Many stakeholders in the public sector commented that applying AASB 13 had been challenging and costly. They requested guidance on how to measure the fair value of non-financial assets of not-for-profit public sector entities not held primarily for their ability to generate net cash inflows, in particular (but not limited to):
(a)                    the market participant assumptions to use in measuring fair value where a public sector entity's asset has few or no market participants (other than the holder of the asset) and where information about market participants' inputs to a current replacement cost model may be scarce;
(b)                   how government-imposed public-sector-specific restrictions on non-financial assets should be taken into account;
(c)                    how to measure the fair value of public sector entity assets using the cost approach; and
(d)                   the concept of obsolescence under the cost approach.
BC8               The Board was advised that the measurement issues are pervasive in the not-for-profit public sector and involve inconsistent practical application of the principles of AASB 13.
BC9               In addition, in considering its Service Concession Arrangements: Grantors Project, the Board decided at its February 2016 meeting that, because a service concession asset is an asset that the grantor uses for its service potential to achieve public service objectives (rather than to generate net cash inflows), only the cost approach to measuring fair value is relevant and, where the operator has been granted the right to future cash flows, this need not be considered in the measurement of the grantor's service concession asset. In developing AASB 1059 Service Concession Arrangements: Grantors, the Board noted that it did not provide guidance on the measurement of service concession assets on the grounds that this would best be developed in a future project