Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p82
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 252668–255718

noted that IPSAS 32 requires a grantor to initially recognise a liability when the grantor recognises the service concession asset. Given its policy of transaction neutrality, the Board considered whether the requirements of Australian Accounting Standards, specifically the application of AASB 15 either directly or by analogy, would support:

(a)                    the recognition of a liability (consistent with IPSAS 32); or

(b)                   the recognition of revenue on the basis that the grantor has no remaining obligations to the operator once it has transferred to the operator the right to charge users.

     BC77            The Board concluded that, from a grantor's perspective, the application of AASB 15 without further guidance may lead to divergence in accounting for a service concession arrangement, as significant judgement would be required to determine whether a service concession arrangement in which the grantor transfers an intangible asset to the operator is within the scope of AASB 15. The Board noted differing views on whether a service concession arrangement involves a contract with a customer (ie whether the right to charge users is considered a licence, whether the operator is considered a customer, or whether the ordinary activities of government include undertaking service concession arrangements as a grantor), and depending on the specific facts and circumstances some service concession arrangements might be a right-of-use licence and others a right of access. The Board preferred the view that the substance of the transaction appears more akin to financing the construction of the service concession asset, rather than a contract with a customer.

     BC78            The Board also noted, in a service concession arrangement, the grantor makes promises, either explicitly or implicitly, to undertake activities in relation to the service concession asset that will benefit the operator. This reflects the fact that a service concession asset is controlled and managed by the grantor to provide public services. The Board acknowledged that the grantor's promise, or the operator's expectation, that the grantor will undertake activities that benefit the operator may in some instances be comparable to promises made by a licensor or expectations of a licensee that the licensor will undertake activities in relation to intellectual property that will benefit the licensee. AASB 15 identifies such licences as licences that provide the licensee with a right to access the underlying intellectual property. AASB 15 specifies that the promise of a right to access intellectual property is a performance obligation that is satisfied over time and the licensor would recognise a contract liability for its remaining performance obligation to provide access.

     BC79            The Board decided that facts and circumstances would need to be assessed for each arrangement to determine whether the arrangement represented a right-of-access licence or a right-of-use licence. The Board preferred all