Changes coming to AASB 13 Fair Value via AASB 2022-10

The Australian Accounting Standards Board has issued amendments and clarifications to its AASB 13 Fair Value Standards, applicable to not-for-profit public sector entities.

The legislative changes become effective 31 December 2023, for financial periods commencing from 1 January 2024, and there is scope to adopt the changes earlier.

Land

The clarifications are in line with submissions made by Adam Wallace and Elise Wallace to the AASB Advisory Panels, which clarify that land assets (particularly restrictive use assets) can only be recognised at an alternate (higher) use if there is strong evidence available that the alternate use is physically, legally, and financially feasible. This encompasses management commitment to dispose of or use the assets for an alternate use, and/or there is already approvals in place that accommodate the alternate use.

Built Assets

There is a change to replacement cost that moves from a greenfields approach to incorporate more brownfield cost elements.

Australis considers these changes as minor to implement from a valuation calculation perspective, though there will be potentially some effect on (increase to) both annual and accumulated depreciation.

Position Paper

Australis has prepared a position paper on the changes that we can supply to entities wanting to know more about these amendments, contact us for further information.