Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p102
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 307876–310921

accounting, if previously applied.

     BC21            A stakeholder expressed the view that the flowchart in paragraph IG10 of the implementation guidance in its current form could be misinterpreted – if either of the top two boxes is 'Yes', then the arrangement would automatically be a service concession arrangement without considering the two criteria in paragraph 2 of AASB 1059: whether the operator provides public services on behalf of the grantor, and whether the operator manages at least some of those services under its own discretion. The Board decided to amend the flowchart for the avoidance of doubt.

     BC22            The Board also decided to amend the table in paragraph IG13 of the implementation guidance to be more consistent with paragraph B10, to indicate that the operator must be responsible for managing at least some of the public services provided through the asset, rather than being responsible for at least some of the management of the asset, for a transaction to be a service concession arrangement.

Basis for Conclusions on AASB 2021-4
This Basis for Conclusions accompanies, but is not part of, AASB 1059. The Basis for Conclusions was originally published with AASB 2021-4 Amendments to Australian Accounting Standards – Modified Retrospective Transition Approach for Service Concession Grantors.

Introduction
     BC1               This Basis for Conclusions summarises the Australian Accounting Standards Board's considerations in reaching the conclusions in this Standard.  It sets out the reasons why the Board developed the Standard, the approach taken to developing the Standard and the key decisions made.  In making decisions, individual Board members gave greater weight to some factors than to others.

Background

Reasons for issuing this Standard

     BC2               The Board received comments from the Treasury office in one jurisdiction regarding an issue applying the modified retrospective method to measure the Grant of a Right to the Operator (GORTO) liability, as stated in paragraph C4(c) of AASB 1059 Service Concession Arrangements: Grantors. The Board considered the stakeholder's comments and decided to propose amendments to AASB 1059 to address the issue.

Issue of Fatal-Flaw Review version of the Standard

     BC3               In May 2021, the Board issued a Fatal-Flaw Review version of the Standard for public comment. The Board received three submissions and informal comments from another stakeholder. All respondents were supportive of the Board changing the modified retrospective method to measure the GORTO liability stated in paragraph C4(c) of AASB 1059.

     BC4               One stakeholder noted that the changes to AASB 1059 paragraph C4(c) proposed in the Fatal-Flaw Review version of the Standard specifically addressed only financial consideration paid by the grantor to the operator prior to the date of initial application of the Standard. The stakeholder commented that the GORTO liability and subsequent revenue would also be likely to be