Post-implementation review of accounting for service concession arrangements by grantors (AASB 1059)

AASB 1059 Service Concession Arrangements: Grantors sets out the accounting requirements for a service concession arrangement by a grantor that is a public sector entity. These requirements are summarised in our previous newsletter article. AASB 1059 has been effective since 2020 and is now subject to a post-implementation review. As part of this process, the Australian Accounting Standards Board is seeking feedback via ITC 49 Post-implementation Review of AASB 1059 Service Concession Arrangements: Grantors on the whether AASB 1059 continues to meet its objectives and remains appropriate.

As part of the planning phase of the post-implementation review of AASB 1059, the AASB obtained feedback from stakeholders. Some of the main comments related to:

• For some arrangements, determining whether an arrangement is within the scope of AASB 1059 is challenging because it involves significant judgement
• Applying the current scoping requirements in AASB 1059 has resulted in some public-private partnerships (PPP arrangements) with similar features to service concession arrangements being scoped out of AASB 1059 and accounted for differently
• In some situations, the measurement requirements of AASB 1059 have resulted in anomalous financial outcomes.

Have your say

The AASB is therefore seeking feedback on the following topics:

• Topic 1: Public service
• Topic 2: Grantor’s control of the service concession asset
• Topic 3: Public sector operator
• Topic 4: Recognition and measurement of service concession assets and related liabilities
• Topic 5: Other matters.

Comments should be provided to the AASB by 28 February 2023.

Next steps

After considering feedback from ITC 49 and concluding the post-implementation review process, the AASB may decide that no action is necessary, or that either standard-setting (amendments to AASB 1059) or additional educational material is needed.