Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p87
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 266261–269519

be allocated to each liability based on their relative fair values, following the approach in AASB 15 to allocating the transaction price to performance obligations. Furthermore, since the liability is not measured directly at fair value under the financial liability model (see paragraph BC75), it would be inappropriate to require such measurement in relation to recognising a hybrid arrangement.

     BC94            The Board concluded the appropriate approach would be to measure the financial liability part of the total liability first, with the remainder of the total liability allocated to the GORTO part of the liability. This approach avoids understating the financial liability, which might occur if the GORTO liability is measured first. Overstatement of the GORTO liability would mean overstatement of the revenues recognised by the grantor under the service concession arrangement. The financial liability is measured and recognised first, even where the service concession asset is under construction. This is illustrated in Example 8 of the Illustrative Examples accompanying this Standard.

Accounting issues addressed in other Australian Accounting Standards
     BC95            Due to the complexity of many service concession arrangements, there may be additional accounting issues related to certain terms in the contract (for example, revenues, expenses, guarantees and contingencies). The Board decided that it was not necessary to repeat in this Standard guidance that appears in other Standards. Accordingly, when another Australian Accounting Standard specifies the accounting and reporting for a component of a service concession arrangement, this Standard references the specific Standard without necessarily providing additional guidance. However, the Board noted some cases (for example, revenue recognition) when the application of another Standard might be difficult, given certain unique features in service concession arrangements. To facilitate consistent implementation of this Standard, the Board decided to provide additional guidance on applying the principles in other Standards when appropriate.

Other revenues
     BC96            The Board considered whether to include in this Standard the Application Guidance paragraphs AG55–AG64 of IPSAS 32 for other revenues. 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, including the following:

(a)                    an upfront payment or a stream of payments;

(b)                   revenue-sharing provisions;

(c)                    a reduction in a predetermined series of payments the grantor is required to make to the operator; and

(d)                   rent payments for providing the operator access to a revenue-generating asset.

     BC97            The Board decided this guidance was not necessary in the Australian context as the existing revenue recognition guidance in Australian Accounting Standards was sufficient.

     BC98            In setting the requirement in paragraph 12, the Board noted deliberations by the IFRS Interpretations Committee on IFRIC 12 with respect to payments by the operator to