Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p80
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 247221–250180

value of the service concession asset, and the grantor applying AASB 9 subsequently to the accounting for the financial liability. The Board noted this view is consistent with its decision to not include in ED 261 or AASB 1059 the guidance in paragraph AG49 of IPSAS 32 relating to treating shadow tolls payable by the grantor as payments for the usage and not the acquisition of the service concession asset.

     BC74            The Board noted that the approach described in paragraph BC73 may result in asymmetry in accounting for the same arrangement by the operator. This is due to AASB Interpretation 12 (paragraph 16) permitting the operator to recognise a financial asset only to the extent that it has an unconditional present right to receive cash from or at the direction of the grantor. The operator has an unconditional contractual right to receive cash if the grantor contractually guarantees the operator's cash flows. In the absence of a guarantee from the grantor, the operator's contractual right is conditional on third-party usage of the service concession asset, and the operator recognises an intangible asset rather than a financial asset. The Board concluded the principles appropriate to this Standard are more important than achieving symmetry in accounting by the parties to the service concession arrangement.

     BC75            Consistent with AASB Interpretation 12, this Standard requires the application of the financial instrument Standards to the financial liability recognised under paragraph 11, except where this Standard requires otherwise. In deliberating the application of the financial instrument Standards to the recognition of a financial liability, the Board considered the following:

          (a)                    whether the financial liability should be measured in accordance with AASB 9 rather than measured initially at the same amount as the service concession asset (current replacement cost). The Board noted that consistent with AASB 9 there is no day-one gain or loss to be recognised, and concluded that the costs of separately measuring the fair value of the financial liability would outweigh the benefits of doing so;

          (b)                   whether to retain, in paragraph 18, the requirement proposed in ED 261 that the grantor allocates the payments to the operator under the contract and accounts separately for the finance charge. The Board noted this proposed requirement would apply if the financial liability is subsequently measured at amortised cost in accordance with AASB 9. However, AASB 9 permits other methods in the subsequent measurement of a financial liability, such as fair value through profit or loss. The subsequent measurement of a financial liability at fair value through profit or loss would not require separate accounting for a finance charge. The Board decided, given AASB 9 addresses the separate accounting for a finance charge, it is sufficient for