Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p91
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 277493–280717

in relation to the following:

          (a)                    service concession arrangement terminology – GFS refers to such arrangements as 'Public Private Partnerships' (PPP);

          (b)                   assessment of whether the grantor recognises a service concession asset – assessment is based on the risks and rewards approach under GFS rather than the control and regulation approach in this Standard;

          (c)                    accounting for a service concession arrangement – the arrangement is accounted for as a finance lease under GFS, but with some differences to AASB 16. The difference in accounting will likely result in differences between GAAP and GFS in the amounts of the assets and liabilities recognised both initially and during the term of the arrangement;

          (d)                   revaluation of service concession assets – GFS requires the asset to be measured using the revaluation model. This Standard references AASB 116 and AASB 138, which permit the cost and revaluation models. AASB 1049 Whole of Government and General Government Sector Financial Reporting requires fair value measurement and the revaluation of assets consistent with the market value measurement requirements of GFS; and

          (e)                    the liability recognised under the GORTO model – GFS acknowledges the GORTO model but does not provide specific accounting requirements. Instead, GFS notes most PPPs are unique and the accounting is to be considered on a case by case basis.

     BC110        The Board weighed its policy on GAAP/GFS harmonisation against its policy of transaction neutrality. The Board observed that some areas of potential difference were known when developing AASB 1049. Others are driven by a difference in the underlying principles. Further, some differences could only be addressed by making changes to the underlying principles in AASB 1059.

     BC111        On balance, the Board considered that it was not necessary to amend its decisions reflected in AASB 1059 in order to better achieve GAAP/GFS harmonisation. The Board noted that AASB 1049 will require entities to identify and explain any material differences arising from different requirements in GAAP as compared with GFS.

Comparison with IPSAS 32
     BC112        This Standard incorporates the key requirements of IPSAS 32, with the main differences detailed in the paragraphs below.

Scope
     BC113        This Standard applies to all public sector entities in both the for-profit and not-for-profit sectors. This is wider than the scope of IPSAS 32, which applies to public sector not-for-profit entities.

Recognition and measurement of service concession assets
     BC114        This Standard includes Application Guidance on the following matters, which is additional to that in IPSAS 32:

          (a)                    the fundamental principle of control of a service concession asset, including guidance on:

               (i)                     when the grantor would control the service concession asset in an environment where the services provided and/or the service pricing is regulated by a third-party regulator;

               (ii)                   the need to