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6 May. 2015

AASB issues proposals on service concession arrangements and fair value disclosures

The AASB has issued exposure drafts ED 261 Service Concession Arrangements: Grantor and ED 262 Fair Value Disclosures of Not-for-Profit Public Sector Entities for comment.  ED 261 addresses the gap in grantor accounting for service concession arrangements.  ED 262 proposes modification of AASB 13 for application by not-for-profit public sector entities. 

ED 261 proposes that a grantor in a service concession arrangement:

(a) recognises an asset provided by an operator that is used in a service concession arrangement;

(b) measures the service concession asset provided by the operator initially at fair value in accordance with AASB 13 Fair Value Measurement, and subsequently in accordance with AASB 116 Property, Plant and Equipment or AASB 138 Intangible Assets, as appropriate; and

(c) recognises a corresponding liability measured at fair value of the service concession asset using either the financial liability model or the grant of a right to the operator model.

Comments on ED 261 are requested to the AASB by 27 July 2015.
Access the media release here.

ED 262 proposes relief for not-for-profit public sector entities from certain specified disclosures in AASB 13 applying to fair value measurements categorised within Level 3 of the fair value hierarchy.  The relief applies to assets within the scope of AASB 116 that are held primarily for their current service potential rather than to generate future net cash inflows.  Adverse comments on ED 262 are requested to the AASB by 4 June 2015.