Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p93
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 283257–286299

arrangement to initially measure the financial liability component for the purpose of dividing a hybrid arrangement. Where this is not practicable, prevailing market rate(s) of interest for a similar instrument with similar credit ratings are applied, as required by the financial instrument Standards.

     BC119        This Standard requires the grantor in a hybrid arrangement to measure the financial liability first, with the remainder of the total liability allocated to the liability related to the grant of the right to the operator. IPSAS 32 requires the grantor to account for the liability in a hybrid arrangement in accordance with the liability recognition requirements in IPSAS 32 generally.

Other revenues
     BC120        IPSAS 32 includes additional application guidance for other revenues, which is not included in this Standard. 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. This Standard instead references AASB 15 and AASB 1058 for application.

Definitions
     BC121        This Standard modifies the defined terms of IPSAS 32. This Standard:

(a)                    replaces the IPSAS 32 term 'binding arrangement', which "describes contracts and other arrangements that confer similar rights and obligations on the parties to it as if they were in the form of a contract", with the term 'contract', which is defined as an "agreement between two or more parties that creates enforceable rights and obligations". This Standard also provides Application Guidance on the term 'contract';

(b)                   modifies the IPSAS 32 definition of a 'grantor' to refer to the grantor granting a 'right to access' the service concession asset to the operator, rather than a 'right to use' the asset;

(c)                    modifies the IPSAS 32 definition of an 'operator' from an entity that "uses the service concession asset" to an entity that has a "right of access to the service concession asset";

(d)                   modifies the IPSAS 32 definition of 'service concession arrangement' to require the operator to be responsible for at least some of the management of the public services provided through the service concession asset and not act merely as an agent on behalf of the grantor. IPSAS 32 identifies this only as a common feature of a service concession arrangement;

(e)                    modifies the IPSAS 32 definition of 'service concession asset' to expressly include major component replacements and previously unrecognised identifiable intangible assets and land under roads, and to exclude goodwill; and

         (f)                    provides guidance on the term 'public service' that is not in IPSAS 32.

Transition
     BC122        This Standard modifies the transition approach of IPSAS 32 to require any net adjustment on transition to