{"id":"F2015L01622","name":"AASB 136 - Impairment of Assets - August 2015","slug":"aasb-136-impairment-of-assets-august-2015","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":93441,"registerId":"commonwealth-F2015L01622-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Other enquiries","sectionType":"part","heading":"Other enquiries","content":"## Other enquiries\n\nPhone: (03) 9617 7600\n\nE-mail: standard@aasb.gov.au\n\nCOPYRIGHT\n\n© Commonwealth of Australia 2026\n\nThis compiled AASB Standard contains IFRS Foundation copyright material. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The Managing Director, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.\n\nAll existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only. Further information and requests for authorisation to reproduce IFRS Foundation copyright material for commercial purposes outside Australia should be addressed to the IFRS Foundation at www.ifrs.org.","sortOrder":0},{"sectionNumber":"Background","sectionType":"part","heading":"Background","content":"## Background\n\n1.  Under AASB 136 Impairment of Assets (July 2004 and August 2015), an impairment loss is the amount by which the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs of disposal (‘net fair value’) and its value in use.\n2.  Paragraph Aus32.1 to AASB 136, required not-for-profit (NFP) entities to determine the value in use of an asset as its depreciated replacement cost (DRC) when the future economic benefits of the asset are not primarily dependent on the asset’s ability to generate net cash inflows and where the entity would, if deprived of the asset, replace its remaining future economic benefits. Paragraph Aus6.2 to AASB 136 defined DRC as “the current replacement cost of an asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset”. Paragraph Aus32.2 explained that “The current replacement cost of an asset is its cost measured by reference to the lowest cost at which the gross future economic benefits of that asset could currently be obtained in the normal course of business”.\n3.  The AASB previously concluded that the Aus paragraphs were needed in AASB 136 to help ensure impairments are not recognised for non-cash-generating assets held by NFP entities when they still embody future economic benefits of a value equal to, or greater than, their carrying amounts. This was based on the view that entities might inappropriately recognise impairment due to the focus of IAS 36 Impairment of Assets, which is incorporated into AASB 136, on cash-generating assets. The value in use of a non-cash-generating asset based on cash flows would be zero or close to zero and the net fair value of the asset could be regarded as relating to a scrap value for a specialised asset.","sortOrder":1},{"sectionNumber":"The need to issue AASB 2016-4","sectionType":"part","heading":"The need to issue AASB 2016-4","content":"## The need to issue AASB 2016-4\n\n1.  Clarifications were sought by some constituents about the interaction between the notion of DRC for determining the value in use of assets held by NFP entities in the circumstances described in paragraph BC3 and the notion of current replacement cost (CRC) as a measure of the fair value of an asset under the cost approach in AASB 13 Fair Value Measurement. AASB 13 (paragraphs B8 and B9) identifies the cost approach as a valuation technique for measuring fair value. Under AASB 13, the cost approach reflects the amount that would be required currently to replace the service capacity of an asset.\n2.  Some commentators argued that, consistent with the role of CRC as a measure of fair value under AASB 13 (reflecting the assumptions that market participants would use when pricing the asset), DRC should not be an entity-specific measure of recoverable amount under AASB 136\\. These commentators supported the objective of the existing requirements of AASB 136 of not basing the recoverable amount of primarily non-cash-generating assets held by NFP entities on discounted cash flows. They also noted that when DRC was included in AASB 116 Property, Plant and Equipment (July 2004), there was ambiguity as to whether it was a measure of fair value or a measure of value in use and that with the publication of AASB 13 and its exposition of the cost approach, it became clear that DRC under the AASB 116 is a measure of fair value as is CRC under AASB 13. Accordingly, for such assets, they argued that DRC should be used to determine fair value as a measure of recoverable amount and noted that its designation as a measure of value in use under AASB 136 might be a source of confusion.\n3.  Other commentators argued that DRC is identified as a measure of fair value in paragraph 33 to AASB 116 (July 2004) , in cases where there is no market-based evidence of fair value because of the specialised nature of the asset and the item is rarely sold, except as part of a continuing business. They noted that, with the publication of AASB 13, the cost approach plays a similar role as a measure of fair value when the market and income approaches to valuation are not applicable due to the specialised nature of the asset.\n4.  Further comments on the interaction between DRC under AASB 136 and CRC under AASB 13 were sought in AASB outreach with key stakeholders, such as preparers and auditors, and valuers of NFP entities’ assets, particularly in regard to assets held by public sector entities.\n5.  Comments from some preparers in the public sector who participated in the outreach indicated that separate evaluations of CRC as a measure of fair value under AASB 13 and DRC as a measure of value in use under AASB 136 are not usually performed. These commentators noted that, although CRC as a measure of fair value under AASB 13 and DRC as a measure of value in use under AASB 136 are different in concept, for specialised assets where the market is typically inactive, the highest and best use is generally their current use. Accordingly, in their view the CRC of such assets under AASB 13 and their DRC under AASB 136 are, in practice, interchangeable. Some noted one reason for this outcome is that highest and best use requires consideration of reasonably possible uses, not every possible use.\n6.  Some valuers participating in staff outreach noted:\n    1.  in the case of a NFP entity where the fair value of a specialised asset is based on the cost approach, the entity acts as the ‘buyer’ and is competing with other market participants in order to acquire the asset. They argue that this means CRC under AASB 13 should not be different from DRC under AASB 136;\n    2.  CRC under AASB 13 and DRC under AASB 136 are regarded as similar measures of fair value and the existing use or alternative uses are considered and assessed on a case-by-case basis; and\n    3.  the highest and best use of an asset determines its fair value, but restrictions (such as legal restrictions) on the use of an asset often mean that the highest and best use of an asset is its current use.","sortOrder":2},{"sectionNumber":"The AASB’s initial deliberations","sectionType":"part","heading":"The AASB’s initial deliberations","content":"## The AASB’s initial deliberations\n\n1.  The AASB noted that DRC is identified as a measure of fair value in paragraph 33 to AASB 116 (July 2004) in cases where there is no market-based evidence of fair value because of the specialised nature of the asset and the item is rarely sold, except as part of a continuing business. The AASB also noted that, with the publication of AASB 13, CRC plays a similar role for assets that are specialised in nature and are rarely sold, such as many assets held by public sector entities. The AASB further noted that the cost of disposal of such assets is not expected to be material.\n2.  The AASB noted that fair value under AASB 13 is defined as an exit price. Therefore, CRC under AASB 13 is conceptually different from DRC as a measure of value in use under AASB 136, being an entry price. The AASB noted, however, that:\n    1.  the description of the cost approach in AASB 13 indicates that CRC incorporates obsolescence as does the definition of DRC under AASB 136, where accumulated depreciation encompasses obsolescence;\n    2.  valuers use similar approaches in determining DRC and CRC. Factors such as physical obsolescence, functional obsolescence and economic obsolescence are all considered in determining each measure; and\n    3.  valuers’ practice involves considering as a starting point whether the valuation is of a specialised asset in its current use or an alternative use and whether there are any restrictions on the use of the asset.\n3.  The AASB concluded that DRC as a measure of value in use of specialised assets that are rarely sold is unlikely to be materially different from DRC (or CRC) as a measure of fair value of such assets. This is because, for non-cash-generating specialised assets, the market is typically inactive and their highest and best uses would usually be their current uses rather than their sale, resulting in CRC of such assets being not materially different from their DRC, as the following example shows:\n\nExample\n\nAn entity self-constructs a specialised facility. Because this is the entity’s specific practice in its industry, it can construct the facility for $8.5 million, whereas the cost of construction of the facility to any other market participant would be $10 million. As the construction of the facility has just been completed, there is no obsolescence or depreciation.\n\nThe issues are: (a) whether the CRC of the facility should be measured at $10 million or $8.5m under AASB 13; and (b) whether the DRC of the facility should be measured at $10m or $8.5m under AASB 136.\n\nAnalysis\n\nParagraph B9 to AASB 13 states that “a market participant buyer would not pay more for an asset than the amount for which it could replace the service capacity of that asset”. The implication of that statement depends on whether the market participant buyer includes, or has the attributes of, the vendor. Paragraph BC78 of the IASB’s Basis for Conclusions on IFRS 13 Fair Value Measurement states that, in relation to a specialised non-financial asset, “In effect, the market participant buyer steps into the shoes of the entity that holds that specialised asset” (emphasis added). Based on that comment, it seems appropriate in the above example to regard the market participant buyer as being capable of self-constructing the asset for $8.5 million, in which case CRC should be measured at $8.5 million under AASB 13\\. Because value in use is an entity-specific measure, the DRC of the facility would also be measured at $8.5 million under AASB 136.\n\n1.  The AASB noted that, when the AASB 136 impairment model (as per IAS 36) is applied to non-cash-generating specialised assets that are rarely sold, the value in use of the asset is typically less than its net fair value because the asset is generally held for continuing use of its service capacity, not the generation of cash inflows. Further, because these assets are rarely sold, their cost of disposal is typically negligible. The AASB concluded that, in such circumstances, the recoverable amount of the asset would be materially the same as fair value determined under AASB 13.\n2.  The AASB noted that AASB 13 has addressed the concerns identified in paragraph BC4 above that the net fair value of an asset could be regarded as relating to a scrap value for a specialised asset leading to an inappropriate recognition of impairment. Paragraph BC78 of the IASB’s Basis for Conclusions on IFRS 13 refers to the concerns that an exit price would be based on scrap value (particularly given the requirement to maximise the use of observable inputs, such as market prices) and not reflect the value that an entity expects to generate by using the asset in its operations. It notes that, in such circumstances, the scrap value for an individual asset would be irrelevant because an exit price reflects the sale of the asset to a market participant that has, or can obtain, the complementary assets and the associated liabilities needed to use the specialised asset in its own operations. In effect, the market participant buyer steps into the shoes of the entity that holds that specialised asset.\n3.  The AASB noted that, with the issuance of AASB 13, the fair value of non-financial assets is determined under that Standard. Accordingly, with the CRC measure being available under AASB 13, the notion of DRC included in AASB 116 (July 2004) would no longer be applicable in estimating the fair value of specialised non-financial assets.\n\nED 269 proposals\n\n1.  The AASB published ED 269 Recoverable Amount of Non-cash-generating Specialised Assets of Not-for-Profit Entities proposing that:\n    1.  references to DRC as a measure of value in use in AASB 136 be deleted from that Standard; and\n    2.  paragraph Aus5.1 be included in AASB 136 to clarify that, because primarily non-cash-generating specialised assets held for continuing use of their service capacity are rarely sold, their cost of disposal is typically negligible and, accordingly, the recoverable amount of such assets is expected to be materially the same as fair value, determined under AASB 13.\n2.  The Board noted with the removal of DRC as a measure of value in use from AASB 136, the recoverable amount of a primarily non-cash-generating specialised asset held by an NFP entity for continuing use of its service capacity is determined as the higher of value in use and net fair value. The recoverable amount would be fair value since the value in use of a primarily non-cash-generating asset would be small or close to zero.\n3.  The ED 269 proposals identified implications for assets held both under the revaluation model and under the cost model as outlined below:\n\nRevaluation model\n\nNFP entities that regularly revalue their primarily non-cash-generating specialised assets to fair value would find the application of the impairment model under AASB 136 redundant.\n\nCost model\n\nIf there are indicators of impairment, NFP entities applying the cost model to their primarily non-cash-generating specialised assets would need to determine their recoverable amounts at fair value to establish whether there is a need to recognise impairment.","sortOrder":3},{"sectionNumber":"Redeliberation of ED 269 proposals","sectionType":"part","heading":"Redeliberation of ED 269 proposals","content":"## Redeliberation of ED 269 proposals\n\n1.  The AASB considered comments on the ED 269 proposals received via submissions and further AASB targeted outreach. The AASB noted that commentators were generally supportive of ED 269 proposals and discussed concerns raised about some aspects of the proposals.\n\nClarifying CRC\n\n1.  Some valuation industry participants consulted in AASB outreach were of the view that some constituents continue to see CRC under AASB 13 as the gross replacement cost of a new asset rather than the CRC of the remaining service capacity of the asset. The AASB observed that:\n    1.  paragraph B8 to AASB 13 describes CRC as the amount that would be required currently to replace the service capacity of an asset. This is a reference to replacement cost of the service capacity of the asset and not a new asset; and\n    2.  paragraph B9 to AASB 13 further clarifies that the price that would be received for the asset is based on the cost to a market participant buyer to acquire or construct a substitute asset of comparable utility, adjusted for obsolescence and that obsolescence encompasses physical deterioration, functional (technological) obsolescence and economic (external) obsolescence.\n2.  The AASB concluded that the description of CRC in AASB 13 is clear that CRC is not a gross value reflecting the replacement cost of a new asset, rather it is replacement cost of the remaining service capacity of the asset.\n3.  The AASB also confirmed its view that DRC under AASB 136 is equivalent to CRC under AASB 13. It was noted that the description of the cost approach in AASB 13 indicates that CRC incorporates obsolescence as did the definition of DRC under AASB 136, where accumulated depreciation encompasses obsolescence. It also noted that valuation industry participants in AASB outreach generally were of the view that the description of CRC in AASB 13 is consistent with their current valuation practice for determining DRC under a cost approach in that the replacement cost or reproduction cost of a new equivalent asset is adjusted for all relevant types of obsolescence and the issue of overcapacity is also considered in arriving at an optimised value.\n4.  Some commentators noted that the capitalisation of borrowing costs assumed in the example in paragraph BC14 to ED 269 was not common for NFP public sector entities because the ABS GFS Manual prohibits capitalisation of borrowing costs. The AASB noted that capitalisation of borrowing costs would need to be addressed as part of another project.\n\nDisposal costs associated with specialised assets\n\n1.  Some participants in AASB outreach noted the costs of disposal might not be negligible in some cases where non-cash-generating specialised assets are involved. Some had in mind a range of costs they considered potentially material that could be associated with making an asset saleable. As an example, they noted those costs might include material costs of rezoning land.\n2.  The AASB noted that IFRS 13, Illustrative Example 8, clarifies the type of costs that would need to be considered in determining the fair value of assets. In illustrating the determination of highest and best use, the example contrasts the value of land currently developed for industrial use with the land as a vacant site for residential use. In identifying the fair value of the land as a vacant site for residential use it considers the costs of demolishing the factory and other costs necessary to convert the land to a vacant site.\n3.  The AASB noted that disposal costs are costs incurred to sell the asset in its existing state (target asset). The AASB confirmed that, consistent with the example noted in paragraph BC26, costs incurred to enhance the use of an asset, change its nature, or make it marketable would be considered in fair valuing the enhanced asset. Such costs would not be disposal costs of the target asset for the purpose of calculating net fair value. Accordingly, land rezoned for residential or commercial use is a different asset from land with zoning as public land and costs such as decommissioning costs or rezoning costs that change the nature of the asset are not classified as disposal costs of the land in its public use.\n4.  The AASB also noted that disposal costs are ‘normal’ incremental costs directly attributable to disposal of an asset and are not intended to include excessive costs arising from the processes to sell particular assets.\n\nImpairment of revalued assets\n\n1.  Some commentators expressed the view that it was not sufficiently clear whether the proposed paragraph Aus5.1 would apply only to NFP entities as it does not explicitly preclude application by for-profit entities. The AASB confirmed that paragraph Aus5.1 would apply only to primarily non-cash-generating specialised assets of NFP entities held for their service capacity and would not apply to assets of for-profit entities whether or not held for their service capacity.\n2.  Some participants in AASB outreach commented that ED 269 is not clear as to whether it would mean that consideration does not need to be had to whether revalued assets of NFP entities would still need to be tested for impairment if an impairment trigger were present.\n3.  The AASB noted that the objective of removing references to DRC from AASB 136 and determining recoverable amount as fair value is to reduce financial reporting costs to NFP entities holding specialised assets that are held for continuing use of their service capacity. The AASB considered that this is consistent with its Process for Modifying IFRSs for NFPs which notes that “In some cases, the context or increased or reduced prevalence of a transaction or event for PBE/NFP as compared with for-profit entities, may require modifications to the relevant IFRS to ensure that user needs are met while considering the balance between costs and benefits”. The AASB noted that revaluation of non-financial assets in the Australian NFP public sector is more prevalent than in the for-profit sector. The AASB concluded that when non-cash-generating specialised assets of NFP entities that are held for the continuing use of their service capacity are revalued regularly to fair value under the revaluation model in AASB 116 and AASB 138 Intangible Assets, the entity no longer applies AASB 136 to such assets. This is because regular revaluation ensures such assets are carried at an amount that is not materially different from fair value and any impairment would be taken into account as part of revaluation. For such assets, the issue of determining recoverable amount of the asset and magnitude of disposal costs would not be relevant.\n4.  The AASB noted that an entity holding an asset with the intention of selling it would need to apply AASB 5 Non-current Assets Held for Sale and Discontinued Operations and AASB 136 would not apply.\n5.  The AASB decided to proceed with the ED 269 proposals with amendments based on the conclusion noted in paragraph BC31.\n6.  The AASB noted that AASB 101 Presentation of Financial Statements and AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors would apply in implementing the amendments and in respect of comparative information. The AASB also noted that it would not expect the amendments to AASB 136 to change current practice materially.","sortOrder":4}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":7,"scope_assessment":{"changed":false,"description":"The document remains focused on its original purpose: modifying AASB 136's impairment requirements for not-for-profit entities holding specialised non-cash-generating assets. While it references multiple other accounting standards and discusses valuation theory in depth, this is necessary context for explaining why DRC is being removed and fair value substituted. The scope has not expanded beyond the narrow technical issue of impairment measurement for this specific asset class."},"complexity_factors":["Multiple interacting accounting standards referenced (AASB 136, AASB 13, AASB 116, AASB 138, AASB 5, AASB 101, AASB 108)","Technical valuation concepts requiring specialised knowledge: depreciated replacement cost (DRC), current replacement cost (CRC), value in use, fair value, cost approach, highest and best use, obsolescence types (physical, functional, economic)","Distinction between entry price vs exit price concepts in valuation theory","Conditional application limited to specific entity types (not-for-profit) and asset categories (non-cash-generating, specialised, held for service capacity)","Nested exceptions and carve-outs from international standards (IFRS/IAS) with Australian-specific paragraphs (Aus paragraphs)","Cross-references to Basis for Conclusions documents and illustrative examples in other standards","Subtle distinctions between disposal costs vs costs to enhance/change asset nature","Multiple accounting models involved (revaluation model vs cost model) with different implications for each"],"plain_english_summary":"This change to Australian not‑for‑profit accounting removes the requirement to use depreciated replacement cost (DRC) for impairments of specialised, non‑cash‑generating assets and lets entities rely on fair value instead. That means charities, public hospitals, universities and government agencies that revalue assets can avoid separate impairment tests, simplifying valuations and reducing compliance cost."},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"The amendment refines and clarifies the method for determining recoverable amount for a narrow class of assets held by NFP entities rather than expanding the law's subject matter. It removes a legacy, entity-specific measurement (DRC as value in use) and aligns the impairment measurement for specialised non-cash-generating assets with fair-value measurement under AASB 13 (CRC). The change narrows procedural divergence (reduces duplication) and reinterprets existing requirements to align with AASB 13, but does not broaden the range of assets or entities covered beyond the original intent to avoid inappropriate impairments for specialised NFP assets."},"complexity_factors":["Multiple cross-references to other AASB standards (AASB 13 Fair Value Measurement; AASB 116 Property, Plant and Equipment; AASB 138 Intangible Assets; AASB 5; AASB 101; AASB 108).","Conceptual distinctions that must be reconciled (DRC as an entity-specific entry/\"replacement\" measure vs CRC as an exit/fair-value measure under AASB 13).","Targeted, conditional application: applies only to \"primarily non-cash-generating specialised assets\" held by NFPs for continuing service capacity (multiple qualifiers increase rule complexity).","Addition and deletion of specific paragraphs (deletion of DRC references; insertion of Aus5.1) requiring readers to compare old and new text to see practical effect.","Judgment-heavy terms and tests (\"specialised\", \"rarely sold\", \"primarily non-cash-generating\", \"negligible\" disposal costs, \"materially the same\"), which create room for varied application and require valuation expertise.","Different accounting model pathways (revaluation model vs cost model) with divergent operational effects for preparers.","Illustrative example that hinges on valuation assumptions (e.g., market participant construction cost), indicating dependence on valuation practice.","Unresolved interactions with other public-sector accounting rules (e.g., capitalisation of borrowing costs) flagged for separate work.","Moderate length and explanatory basis-for-conclusions material (BC paras) that must be read to understand the rationale and limited exceptions."],"plain_english_summary":"**What this instrument changes (mechanics)\n\n- Deletes the references in AASB 136 that treated \"depreciated replacement cost\" (DRC) as a measure of \"value in use\" for certain not-for-profit (NFP) assets, and clarifies that for those specialised non-cash-generating assets the recoverable amount will generally be the fair value measured under AASB 13 (using the cost approach / current replacement cost (CRC)). (See ED 269 proposals; Aus5.1; BC1–BC33.)\n\n- Leaves the basic impairment test in AASB 136 unchanged: recoverable amount is the higher of value in use and net fair value (fair value less costs of disposal). For the NFP specialised assets described, value in use is typically negligible so fair value will determine recoverable amount. (See Background paras 1–3; BC1–BC3; ED 269 proposals para 1.)\n\n- Explains that CRC under AASB 13 (cost approach) is a replacement cost of the remaining service capacity of the asset—adjusted for obsolescence—so in practice CRC and the prior notion of DRC are normally equivalent for specialised assets rarely sold. (See BC8–BC14; BC21–BC25.)\n\n- Adds an Australian-specific paragraph (Aus5.1) to make clear the expected practical outcome: for primarily non-cash-generating specialised assets held for continuing use of their service capacity, disposal costs are typically negligible and recoverable amount will be materially the same as fair value under AASB 13. (See ED 269 proposals para 1 and Redeliberation paras 1–6.)\n\nWho is affected\n\n- Primary effect: not-for-profit entities (particularly public-sector PBEs) that hold specialised assets which are primarily non-cash-generating and are held for their service capacity (e.g., specialised public infrastructure that is rarely sold). (See Background BC2–BC5; Redeliberation BC31.)\n\n- Preparers using the revaluation model who already measure these assets at fair value: impairment testing under AASB 136 becomes largely redundant for those assets because carrying amounts are already close to fair value. (See Redeliberation BC31–BC33.)\n\n- Preparers using the cost model: when impairment indicators arise they will generally need to measure fair value (AASB 13) to determine recoverable amount, which may require valuers or valuation work. (See ED 269 proposals para 3, Redeliberation paras 1–6.)\n\n- For-profit entities are not affected by the Aus5.1 clarification; the change applies only to NFP specialised assets held for service capacity. (See Redeliberation para 1.)\n\nWhy it matters (purpose-claims and their practical implications)\n\n- Stated purpose: remove confusion between DRC (as it was used in AASB 136) and CRC in AASB 13 and reduce unnecessary impairment work and reporting costs for NFP entities that hold specialised assets for ongoing service delivery. The AASB concluded that for those assets CRC under AASB 13 and the prior DRC measure are unlikely to differ materially, so recoverable amount can be derived from fair value (AASB 13) instead of an entity-specific DRC calculation. (See Background; ED 269 proposals; Redeliberation paras BC1–BC33.)\n\n- Costs, incentives and trade-offs:\n  - Who pays: NFP entities on the cost model may face increased valuation costs when impairment indicators appear because they must measure fair value under AASB 13. (ED 269 proposals para 3; Redeliberation paras.)\n  - Who benefits: NFP entities that regularly revalue specialised assets to fair value (revaluation model) benefit from reduced duplication — less separate impairment testing. (Redeliberation para 3.)\n  - Implementation burden: requires preparers and auditors to apply AASB 13 guidance (including highest-and-best-use and cost approach) and may increase reliance on valuers for fair-value estimates in impairment situations. (Redeliberation BC21–BC26.)\n  - Judgment and discretion: the change relies on judgments about whether an asset is \"specialised\", \"primarily non-cash-generating\", and whether disposal costs are \"negligible\"—these are facts-and-circumstance assessments that create room for differing practice and auditor scrutiny. (Redeliberation paras BC1–BC3; BC26–BC31.)\n  - Opportunity cost / substitution: entities might choose the revaluation model more often to avoid repeated impairment testing; conversely, entities on the cost model will substitute impairment testing based on cash flows (previous DRC approach) with fair-value measures. (ED 269 proposals; Redeliberation para 3.)\n\n- Implementation risks and edge cases called out by the AASB:\n  - Disposal costs that change the nature of an asset (for example rezoning land) are not \"disposal costs\" for net fair value—those costs relate to value enhancement, and the asset under consideration would be a different asset after such changes. (Redeliberation BC26–BC27.)\n  - Capitalisation of borrowing costs and other jurisdictional public-sector accounting rules may need separate consideration (the AASB noted this would be addressed elsewhere). (Redeliberation para BC18.)\n\nConcrete behavioural changes required\n\n- Preparers of NFP specialised assets will determine recoverable amount by applying AASB 13 fair-value techniques (cost approach / CRC) rather than an entity-specific DRC as a component of value in use. (ED 269 proposals; Redeliberation BC8–BC14.)\n\n- Entities using the revaluation model that already measure those assets at fair value will generally stop performing separate impairment calculations for those assets because carrying amounts already reflect fair value. (Redeliberation para 3.)\n\n- Valuers and auditors will need to apply AASB 13's highest-and-best-use and cost-approach guidance when measuring fair value for these specialised, rarely-sold assets, and document judgments about disposability, obsolescence, and whether market-participant buyers could replace service capacity. (Redeliberation BC8–BC14; BC21–BC25.)\n\nWhere to look in the standard text\n\n- Background and rationale: Background paras 1–3, ED 269 proposals, and the Redeliberation section BC1–BC33.\n- Specific changes: ED 269 proposals (deleting DRC references and inserting Aus5.1), and the Redeliberation discussion of application and exceptions (paras BC21–BC33)."}},"importantCases":[],"_links":{"self":"/api/acts/aasb-136-impairment-of-assets-august-2015","history":"/api/acts/aasb-136-impairment-of-assets-august-2015/history","analysis":"/api/acts/aasb-136-impairment-of-assets-august-2015/analysis","conflicts":"/api/acts/aasb-136-impairment-of-assets-august-2015/conflicts","importantCases":"/api/acts/aasb-136-impairment-of-assets-august-2015/important-cases","documents":"/api/acts/aasb-136-impairment-of-assets-august-2015/documents"}}