AASB virtual outreach event – ITC 45: the IPSASB’s proposed ‘current operational value' measurement basis

Tuesday, July 13, 2021

On 6 July 2021, AASB staff hosted a virtual outreach event to discuss ITC 45 on the IPSASB’s proposed new ‘current operational value’ measurement basis for non-cash generating assets in the public sector.

The AASB issued ITC 45 to solicit views on two IPSASB Exposure Drafts regarding measurement of assets and liabilities in the public sector:

• ED 76 Conceptual Framework Update: Chapter 7, Measurement of Assets and Liabilities in Financial Statements; and
• ED 77 Measurement (a proposed new IPSASB Standard).

The IPSASB proposes that, for non-financial assets of not-for-profit public sector entities, fair value is:

• appropriate for assets held primarily for their financial capacity; but
• inappropriate for ‘operational capacity assets’ (i.e. assets held primarily for their service potential, rather than their ability to generate net cash inflows).

Instead, the IPSASB proposes a new current operational value measurement basis for measuring the current value of operational capacity assets.

The virtual discussion focused on the proposed current operational value measurement basis and how it differs from fair value.

The slide pack can be found on the website here. A recording of the virtual discussion is also available on our YouTube channel. Watch it here.

Comments on ITC 45 are due to the AASB by 3 August 2021. Please submit your comments here.

Your comments on ITC 45 will inform the AASB in developing its submissions on the two IPSASB Exposure Drafts and, in the longer term, deciding its response to fair value measurement application issues in the Australian public sector.