Document ID: chunk:federal_register_of_legislation:F2023L00010:body:0:p28
Version: federal_register_of_legislation:F2023L00010
Segment Type: other
Provision Reference: 
Character Range: 74893–77695

13 in a more cost-effective manner by clarifying its application, including clarifying the extent to which preparers of financial statements need to search for information in the absence of observable market inputs to fair value measurements.
BC41            In addition, the modifications in paragraphs Aus29.1 and Aus29.2 regarding an asset's highest and best use are designed to reduce the cost and effort of a not-for-profit public sector entity resulting from searching unnecessarily for possible alternative uses of an asset not held primarily for its ability to generate net cash inflows.
BC42            The Board observed that the modifications to AASB 13 in this Amending Standard:
(a)                    would not necessarily change practice for some not-for-profit public sector entities; and
(b)                   do not indicate that entities changing practice in how they measure relevant assets made an error in applying the existing requirements of AASB 13.

The highest and best use of a non-financial asset not held primarily for its ability to generate net cash inflows (paragraphs Aus28.1, Aus29.1 and Aus29.2)
BC43            The Board noted that paragraph 29 of AASB 13 states a rebuttable presumption that an asset's current use is its highest and best use. Paragraph 29 of AASB 13 states that "… an entity's current use of a non-financial asset is presumed to be its highest and best use unless market or other factors suggest that a different use by market participants would maximise the value of the asset."
BC44            Regarding whether the current use of a non-financial asset of a not-for-profit public sector entity not held primarily for its ability to generate net cash inflows is presumed to be its highest and best use, the Board observed that IFRS 13 paragraph 29 (quoted in paragraph BC43) and the related IASB Basis for Conclusions paragraph (quoted below) provide guidance:
          IFRS 13 does not require an entity to perform an exhaustive search for other potential uses of a non-financial asset if there is no evidence to suggest that the current use of an asset is not its highest and best use … the IASB concluded that in many cases it would be unlikely for an asset's current use not to be its highest and best use after taking into account the costs to convert the asset to the alternative use. (IFRS 13 paragraph BC71)
BC45            However, despite that IASB text, some stakeholders requested the Board to provide additional guidance about the highest and best use of non-financial assets referred to in paragraph BC44. These stakeholders do not consider the cost incurred to search for possible alternative uses of such an asset is justified when such an asset is very unlikely to be used for a purpose other than its current use, for the many