Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p89
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 271966–275032

extent that retrospective application would be impracticable. The Board noted that there are two aspects to retrospective application: reclassification and measurement. The Board took a similar view to the IPSASB that it will usually be practicable to determine retrospectively the appropriate classification of all amounts previously included in a grantor's statement of financial position, but that retrospective measurement of service concession assets might not always be practicable, particularly if an entity has not previously recognised service concession assets and related liabilities, revenues and expenses.

     BC103        As proposed in ED 261, the Board decided that the modified retrospective approach should be available to grantors that have previously recognised service concession assets and related liabilities, as well as to grantors that have not done so. This contrasts with IPSAS 32, which limits this option to grantors that have not previously recognised service concession assets and liabilities. The Board concluded that since the retrospective restatement of service concession assets might not always be practicable, the modified approach would be made available to all grantors.

     BC104        Under the modified retrospective approach (see paragraph C4 of the Standard), the deemed cost of service concession assets is measured at fair value (current replacement cost) at the date of initial application. The Board decided this measurement basis should also apply to assets of the grantor that are reclassified as service concession assets on initial application of the Standard, thus requiring the remeasurement of such assets. The Board noted that this would be consistent with the requirement in paragraph 8 for grantors to measure existing assets that are reclassified as service concession assets at current replacement cost in accordance with the cost approach to fair value at the date of reclassification. ED 261 had not proposed any remeasurement for reclassified assets.

     BC105        The Board considered the approach to the initial recognition by a grantor of previously unrecognised identifiable intangible assets and land under roads as service concession assets on transition, and concluded that no additional transition relief was required. A grantor may elect to apply the modified retrospective approach, requiring measurement of service concession assets at the date of initial application of the Standard, to simplify the measurement of such assets.

     BC106        The Board decided to clarify in the Standard the approach to measuring a liability under the GORTO model when the grantor adopts the modified retrospective transition approach. The starting point is to measure the fair value (current replacement cost) of the service concession asset at the date of initial application, and then adjust that measure to reflect that part of the term of the service concession arrangement has passed. There were different views as to how to make that adjustment. The Board concluded that the adjustment