Document ID: chunk:federal_register_of_legislation:F2023C00402:reg:97:p54
Version: federal_register_of_legislation:F2023C00402
Segment Type: reg
Provision Reference: reg 97 (pt 54/56)
Character Range: 408661–411852

stakeholders have commented that the disclosures required by AASB 16, including the requirements in AASB 16 paragraphs Aus59.1─Aus59.2, appear to provide sufficient information to users of financial statements about concessionary leases for them to understand the effects of the leases on the financial position, financial performance and cash flows of the entity, in the absence of fair value information; and

          (c)                    some stakeholders have commented that recognising income resulting from initially measuring such right-of-use assets at fair value, and the subsequent amortisation of the right-of-use assets, might not meet the information needs of users of financial statements. This might particularly be the case when a user is more interested in the entity's expenses that need to be funded rather than the value of an asset consumed during the financial period that would not need to be funded.

     BC16            Therefore, having regard to the AASB Not-for-Profit Entity Standard-Setting Framework, the Board decided to propose retaining the accounting policy choice in AASB 16 paragraphs Aus25.1–Aus25.2 on an ongoing basis (ie with no plan to reconsider the accounting policy choice) for not-for-profit private sector lessees to elect to initially measure a class of concessionary right-of-use assets at cost or fair value.

Not-for-profit public sector lessees
     BC17            Regarding not-for-profit public sector lessees, the Board considered that a decision about the initial measurement of right-of-use assets arising under concessionary leases should be deferred until additional guidance on how to measure the fair value of such right-of-use assets is discussed.

     BC18            The Board decided to consider outcomes of the concessionary leases part of the IPSASB's current Leases project and the Board's Exposure Draft proposing modifications to AASB 13 for not-for-profit public sector entities before reconsidering the application of fair value for concessionary leases in the not-for-profit public sector.

     BC19            The Board noted concerns raised by public sector stakeholders regarding the difficulty of measuring the fair value of historical concessionary leases. However, the Board decided not to propose grandfathering concessionary leases currently in place from a possible future fair value requirement at this time but to consider grandfathering if in the future it considers removing the accounting policy choice to initially measure right-of-use assets arising under concessionary leases at cost.

Finalisation of the ED 318 proposals
     BC20            The Board received nine formal comment letters in response to ED 318. Following the consultation period, and after considering the comments received, the Board decided to proceed with issuing this Standard, with some changes from the proposals in ED 318.

Income of not-for-profit entities
     BC21            The feedback received indicated that, whilst respondents to ED 318 did not raise concerns with the illustrated application of the recognition and measurement requirements in the proposed amendments to the illustrative examples in AASB 15,