Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p60
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 192881–196069

of alternatives for the accounting for service concession arrangements by a grantor. This included consideration of:

          (a)                    whether under the hierarchy for selecting accounting policies set out in AASB 108, the grantor could apply AASB Interpretation 12 by analogy. The Board (in December 2007) noted that, in accordance with AASB 108, the management of an entity must use its judgement in developing and applying an accounting policy that results in information that is both relevant and reliable to the economic decision-making needs of users, including that the financial statements reflect the economic substance of the transaction or event. In making this judgement, management must refer to, and consider the applicability of, the requirements and guidance in Australian Accounting Standards (including Interpretations) dealing with similar and related issues, and the definitions, recognition criteria and measurement concepts in the Framework for the Preparation and Presentation of Financial Statements. The Board concluded public sector grantors are required to consider Interpretation 12 in developing their accounting policy for service concession arrangements, and could choose to follow the Interpretation, although it does not apply mandatorily;

          (b)                   the IPSASB's project on grantor accounting for service concession arrangements, which the Board followed closely by issuing the IPSASB's consultation documents in Australia as Invitation to Comment ITC 16 Request for Comment on IPSASB Consultation Paper Accounting and Financial Reporting for Service Concession Arrangements (April 2008) and Exposure Draft ED 194 Request for Comment on IPSASB Exposure Draft Service Concession Arrangements: Grantor (April 2010). The Board considered the feedback from constituents in preparing its submissions on the IPSASB proposals; and

          (c)                    other approaches to the accounting for service concession arrangements, which are identified further in this Basis for Conclusions.

Issue of ED 261 and additional public versions
     BC7               After considering the alternatives, the Board decided to develop an Australian Accounting Standard on grantor accounting for service concession arrangements, based on IPSAS 32, to address the lack of guidance. The Board issued Exposure Draft ED 261 Service Concession Arrangements: Grantor in May 2015. The Board took into account its policy of making Australian Accounting Standards with a view to requiring like transactions and events to be accounted for in a like manner by all types of entities, referred to as 'transaction neutrality', in restricting the scope of ED 261 to a grantor that is a public sector entity. The Board noted that it is highly unlikely that a service concession arrangement would involve a grantor that is a private sector entity. Consequently, only in rare instances would a private sector grantor require specific guidance on the accounting for a service concession arrangement.

     BC8               The Board conducted extensive outreach on the proposals in ED 261, including roundtable discussions in Melbourne, Brisbane