Document ID: chunk:federal_register_of_legislation:F2024C00046:body:0:p64
Version: federal_register_of_legislation:F2024C00046
Segment Type: other
Provision Reference: 
Character Range: 166131–169063

would be considered as part of a broader future Board project.

Significant issues

Property, plant and equipment held by not-for-profit public sector entities
BC8 The Board discussed the prevailing practice in the Australian not-for-profit public sector, compared to other sectors, of revaluing property, plant and equipment subsequent to initial measurement and recognition.  It noted that assets such as road infrastructure and national parks were typically only held by public sector entities, but did not consider the nature of such assets in itself to be a sufficient sector specific differentiator, as assets held by private sector entities may similarly vary significantly across entities operating in different industries.
BC9 The Board noted that property, plant and equipment is primarily held for the purposes of delivering the not-for-profit entity's public service objectives rather than being held to generate net cash inflows.  The Board considered whether the relief should be extended to similar assets held by not-for-profit entities in the private sector.  The Board observed that private sector entities, including not-for-profit private sector entities, may similarly hold assets other than for the purpose of generating net cash inflows.  However, given the diversity of assets held by not-for-profit public sector entities, the information about assets held for their current service potential was likely to be different from such assets held by private sector entities.
BC10 The Board considered the extent and variety of long-lived assets measured on the fair value basis in the public sector and noted the resultant impact on the number of classes of assets determined for the purposes of satisfying the disclosure requirements of AASB 13.  The Board observed that, in many instances, the valuation technique applied to these assets used unobservable inputs (Level 3 inputs) and that the assets were predominantly categorised within Level 3 in the fair value hierarchy for the purposes of making the disclosures specified by AASB 13.  The Board discussed examples of fair value disclosures made in published financial statements of not-for-profit public sector entities.  The Board observed that the reported range of many inputs, for example, the cost per square metre applied in the valuation of heritage buildings and the adjustment made to reflect the market-participant restricted use of an asset, varied widely within an asset class.  The Board noted that this variation is likely to be a function of the number of assets grouped into each class, and that it may be impractical for entities to provide disclosures at a more disaggregated level.

Balance of costs and benefits
BC11 The Board concluded that it is appropriate to depart from its policy of transaction neutrality for assets within the scope of AASB 116 that are primarily held for their current service potential rather than to generate