Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p88
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 269234–272247

as the existing revenue recognition guidance in Australian Accounting Standards was sufficient.

     BC98            In setting the requirement in paragraph 12, the Board noted deliberations by the IFRS Interpretations Committee on IFRIC 12 with respect to payments by the operator to the grantor. The Board concluded no additional guidance was necessary in relation to the requirement that the grantor recognise the liability initially at the same amount as the service concession asset, adjusted by the amount of any other consideration from the grantor to the operator, or from the operator to the grantor.

     BC99            The Board observed that adjusting the liability for additional consideration from the operator to the grantor differed from the approach set out in an IFRIC agenda decision (July 2016). The IFRIC agenda decision noted that where the operator recognised a financial asset under a service concession arrangement, the operator would account for the payments to the grantor as a reduction of the transaction price, reducing the operator's revenue. Under this Standard, the payments from the operator would increase the grantor's liability, rather than reduce the carrying amount of the service concession asset. The asset is measured at fair value (current replacement cost) as a fundamental principle of this Standard, in order to reflect the service potential of the asset rather than future cash flows. The adjustment to the liability affects the grantor's revenue based on the pattern of revenue recognition during the period of the service concession arrangement.

Disclosures
     BC100        The Board proposed in ED 261 only minor changes to the disclosure requirements in IPSAS 32. In finalising the Standard, the Board added the objective of the disclosure requirements to paragraph 28, and clarified in paragraph 29 the flexibility for a grantor to classify service concession assets across more than one class of assets for the purposes of AASB 116 or AASB 138, as appropriate, and for the disclosures required by this Standard.

Transition
     BC101        This Standard requires an entity to apply the Standard retrospectively either in accordance with AASB 108 or under a simplified approach from the beginning of the earliest period for which comparative information is presented in the financial statements (the date of initial application). The modified retrospective approach requires a grantor to recognise and measure service concession assets and related liabilities at the date of initial application, rather than at an earlier date.

     BC102        The general requirement in AASB 108 is that accounting policy changes should be accounted for retrospectively, except to the extent that retrospective application would be impracticable. The Board noted that there are two aspects to retrospective application: reclassification and measurement. The Board took a similar view to the IPSASB that it will usually be practicable to determine retrospectively the