Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p2
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 3102–6231

2021-4

Australian Accounting Standard AASB 1059 Service Concession Arrangements: Grantors (as amended) is set out in paragraphs 1 – 29 and Appendices A – E.  All the paragraphs have equal authority.  Paragraphs in bold type state the main principles.  Terms defined in Appendix A are in italics the first time they appear in the Standard.  AASB 1059 is to be read in the context of other Australian Accounting Standards, including AASB 1048 Interpretation of Standards, which identifies the Australian Accounting Interpretations, and AASB 1057 Application of Australian Accounting Standards.  In the absence of explicit guidance, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies.

Comparison with international pronouncements
AASB 1059 Service Concession Arrangements: Grantors as amended applies to all public sector entities, irrespective of whether they are for-profit or not-for-profit entities.

AASB 1059 and IPSAS
AASB 1059 is based on IPSAS 32 Service Concession Arrangements: Grantor. However, public sector entities that comply with AASB 1059 may not be in compliance with IPSAS 32 because of differences between the Standards. The more significant differences include the following:
     (a)                    AASB 1059 applies to public sector entities in both the for-profit and not-for-profit sectors, whereas IPSAS 32 applies only to not-for-profit public sector entities;

     (b)                   AASB 1059 requires the grantor to initially measure a service concession asset provided by the operator at current replacement cost in accordance with the cost approach to fair value in AASB 13 Fair Value Measurement. IPSAS 32 specifies measurement at fair value generally;

     (c)                    an existing asset of the grantor, including a previously unrecognised identifiable intangible asset or land under roads, that is reclassified as a service concession asset is measured at fair value (current replacement cost) at the date of reclassification under AASB 1059. IPSAS 32 does not permit such remeasurement or the recognition of previously unrecognised identifiable intangible assets or land under roads;

     (d)                   AASB 1059 requires the grantor to recognise a financial liability where the grantor has a contractual obligation to pay cash to the operator for third-party usage of a service concession asset, with or without guaranteeing a minimum amount to the operator. IPSAS 32 refers to such an arrangement as a 'shadow toll' arrangement and requires the grantor to account for the payments as an expense when paid instead of recognising a financial liability at the commencement of the arrangement;

     (e)                    AASB 1059 provides more guidance on the term 'public service' than IPSAS 32; and

     (f)                    IPSAS 32 includes additional application guidance for other revenues. Other revenues relate to compensation by the operator to the grantor for access to the service concession asset by providing the grantor with a series of predetermined inflows