Document ID: chunk:federal_register_of_legislation:F2023L00010:body:0:p40
Version: federal_register_of_legislation:F2023L00010
Segment Type: other
Provision Reference: 
Character Range: 107653–110470

governance structure affecting the not-for-profit public sector entity.
BC78            The Board observed that typical examples of the appropriate level of management of an entity holding an asset not primarily for its ability to generate net cash inflows would include a local government council, the entity's chief executive officer and, where the entity is controlled by a government, the entity's responsible Minister or the Cabinet of that government.
BC79            It should be noted that if a non-financial asset's alternative use is identified as its highest and best use and the alternative use has a primary purpose of generating net cash inflows, the asset would subsequently be outside the scope of this Amending Standard.

Disclosure where the highest and best use of an asset differs from its current use (paragraph Aus93.2)
BC80            Paragraph 93(i) of AASB 13 includes the following disclosure requirement: "… for recurring and non-recurring fair value measurements, if the highest and best use of a non-financial asset differs from its current use, an entity shall disclose that fact and why the non-financial asset is being used in a manner that differs from its highest and best use." Some ED respondents commented that there is uncertainty whether the proposed principle that the asset's current use is presumed to be its highest and best use unless rebutted under the ED's proposed criteria would also be applicable to the disclosure requirement in paragraph 93(i) of AASB 13. That is, the Board was advised of concern that the relief from having to search for nebulous possible higher and better uses of an asset might be negated if that relief does not apply to the requirements of paragraph 93(i) of AASB 13.
BC81            The Board noted that disclosures under paragraph 93(i) of AASB 13 would not be required unless the entity has determined that the asset's highest and best use differs from its current use. In addition, the Board concluded that an entity should be required to consider whether this difference exists only when, in accordance with paragraphs Aus29.1 and Aus29.2, at the measurement date the asset is classified as held for sale or held for distribution to owners in accordance with AASB 5 or it is highly probable that the asset will be used for an alternative purpose to its current use. For the avoidance of doubt, the Board decided to include paragraph Aus93.2 to make this explicit.

Financially feasible use (paragraph Aus28.1)
BC82            The Board was also asked to clarify the application of 'financially feasible use' in paragraph 28(c) of AASB 13 to non-financial assets of not-for-profit public sector entities not held primarily for their ability to generate net cash inflows, because those assets are not held primarily to produce an investment