Document ID: chunk:federal_register_of_legislation:F2024C00046:body:0:p134
Version: federal_register_of_legislation:F2024C00046
Segment Type: other
Provision Reference: 
Character Range: 355310–358295

13 set out in this Standard (eg the modification of the guidance on 'financially feasible use' in paragraph Aus28.1) do not indicate that the income approach cannot be applied when measuring the fair value of a non-financial asset of a not-for-profit public sector entity not held primarily for its ability to generate net cash inflows. The entity needs to use judgement in determining which valuation technique (or combination of techniques) to apply, considering all facts and circumstances and the availability of observable inputs relevant to the subject asset.
BC233        In relation to the request for guidance on the quantum of discounts deducted for the effects of restrictions when measuring the fair value of restricted assets using the market approach (see paragraph BC226(b)), the Board noted that, for land held by not-for-profit public sector entities, the market approach is primarily applied. The Board rejected the notion of developing guidance on the quantum of discounts in relation to land for the reasons set out in paragraphs BC253 and BC254.
BC234        Further, the Board observed that most public sector entities do not determine their own accounting policies for applying the requirements of Australian Accounting Standards, particularly in relation to policies for transactions that are common across the public sector – those policies are determined by the Treasury or Finance Department (or other authority) or the Office of Local Government in each jurisdiction. In relation to the Board's conclusion not to develop guidance beyond the scope of that in this Standard, if the Treasury or Finance Department (or other authority) and/or the Office of Local Government in a jurisdiction desires greater consistency in the valuation approach(es) used to measure the fair value of particular types or classes of non-financial assets in a jurisdiction, it may choose to designate a valuation approach for application to those assets held by public sector entities in its jurisdiction. In effect, where AASB 13 requires the exercise of judgement regarding the appropriate valuation approach, the Treasury or Finance Department (or other authority) and/or the Office of Local Government may apply judgement on behalf of entities in its jurisdiction.

Fair value measurement of land and improvements on land subject to public-sector-specific legal restrictions

Original request from stakeholders in 2017
BC235        All land is subject to zoning restrictions, and some land may have an easement restriction. Stakeholders have informed the Board that many not-for-profit public sector entities are subject to public-sector-specific legal restrictions beyond the zoning and easement restrictions (such as legislation specific to public sector entities or directions from Ministers) prohibiting the entity from using the land and improvements on land for a purpose other than its current use. For example, a not-for-profit public sector entity might be subject to