//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
Commonwealth legislation
This amending standard adds targeted guidance to AASB 13 for not‑for‑profit public sector entities measuring fair value of non‑financial assets not held primarily to generate cash inflows. It clarifies how to treat highest-and-best-use, develop unobservable inputs, apply the cost approach, and disclosure, and requires prospective application for annual periods starting 1 January 2024.
Want the full deep dive?
Zoe can write the in-depth analysis on top of the summary above: how it works, who it affects and what each part actually does.
Direct links to the current provisions in Accounting Standard AASB 2022-10 Amendments to Australian Accounting Standards – Fair Value Measurement of Non-Financial Assets of Not-for-Profit Public Sector Entities.
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
?xml version="1.0" encoding="utf-8" standalone="no"?>
| AASB Standard | AASB 2022-10<br>December 2022 |
|---|
Amendments to Australian Accounting Standards – Fair Value Measurement of Non-Financial Assets of Not-for-Profit Public Sector Entities
[AASB 13]
This Standard is available on the AASB website: www.aasb.gov.au.
Australian Accounting Standards Board
PO Box 204
Collins Street West
Victoria 8007
AUSTRALIA
Phone: (03) 9617 7600
E-mail: standard@aasb.gov.au
Website: www.aasb.gov.au
Phone: (03) 9617 7600
E-mail: standard@aasb.gov.au
COPYRIGHT
© Commonwealth of Australia 2022
This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission. Requests and enquiries concerning reproduction and rights should be addressed to The Managing Director, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.
ISSN 1036-4803
Contents
PREFACE
ACCOUNTING STANDARD
AASB 2022-10 AMENDMENTS TO AUSTRALIAN ACCOUNTING STANDARDS – FAIR VALUE MEASUREMENT OF NON-FINANCIAL ASSETS OF NOT-FOR-PROFIT PUBLIC SECTOR ENTITIES
from paragraph
OBJECTIVE 1
APPLICATION 2
AMENDMENTS TO AASB 13 5
COMMENCEMENT OF THE LEGISLATIVE INSTRUMENT 9
APPENDIX
F Australian implementation guidance for not-for-profit public sector entities
Australian illustrative examples for not-for-profit public sector entities
BASIS FOR CONCLUSIONS
Australian Accounting Standard AASB 2022-10 Amendments to Australian Accounting Standards – Fair Value Measurement of Non-Financial Assets of Not-for-Profit Public Sector Entities is set out in paragraphs 1 – 9. All the paragraphs have equal authority.
Preface
Standards amended by AASB 2022-10
This Standard makes amendments to AASB 13 Fair Value Measurement (August 2015) for application by not-for-profit public sector entities.
Main features of this Standard
Main requirements
This Standard amends AASB 13, including adding authoritative implementation guidance and providing related illustrative examples, for fair value measurements of non-financial assets of not-for-profit public sector entities not held primarily for their ability to generate net cash inflows. Specifically, for such an asset, this Standard:
(a) specifies that the entity is required to consider whether the asset’s highest and best use differs from its current use only when, at the measurement date, it is:
(i) classified as held for sale or held for distribution to owners in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations; or
(ii) highly probable that the asset will be used for an alternative purpose to its current use;
(b) clarifies that the asset’s use is ‘financially feasible’ if market participants would be willing to invest in the asset’s service capacity, considering both the capability of the asset to be used to provide needed goods or services to beneficiaries and the resulting cost of those goods or services;
(c) specifies that, if both the market selling price of a comparable asset and some market participant data required to measure the fair value of the asset are not observable, an entity uses its own assumptions as a starting point in developing unobservable inputs and adjusts those assumptions to the extent that reasonably available information indicates that other market participants (including, but not limited to, other not-for-profit public sector entities) would use different data; and
(d) provides guidance on how the cost approach is to be applied to measure the asset’s fair value, including guidance on the nature of costs to include in the replacement cost of a reference asset and on the identification of economic obsolescence.
Application date
This Standard applies prospectively to annual periods beginning on or after 1 January 2024, with earlier application permitted.
Accounting Standard AASB 2022-10
The Australian Accounting Standards Board makes Accounting Standard AASB 2022-10 Amendments to Australian Accounting Standards – Fair Value Measurement of Non-Financial Assets of Not-for-Profit Public Sector Entities under section 334 of the Corporations Act 2001.
Keith Kendall
Dated 15 December 2022 Chair – AASB
Accounting Standard AASB 2022-10
Amendments to Australian Accounting Standards – Fair Value Measurement of Non-Financial Assets of Not-for-Profit Public Sector Entities
Objective
1 This Standard amends AASB 13 Fair Value Measurement (August 2015), including adding authoritative implementation guidance and providing related illustrative examples, for application by not-for-profit public sector entities.
Application
2 The amendments set out in this Standard apply to entities and financial statements in accordance with the application of AASB 13 set out in AASB 1057 Application of Australian Accounting Standards.
3 This Standard applies to annual periods beginning on or after 1 January 2024. This Standard may be applied to annual periods beginning before 1 January 2024.
4 This Standard uses underlining, striking out and other typographical material to identify some of the amendments to a Standard, in order to make the amendments more understandable. However, the amendments made by this Standard do not include that underlining, striking out or other typographical material. Amended paragraphs are shown with deleted text struck through and new text underlined. Ellipses (…) are used to help provide the context within which amendments are made and also to indicate text that is not amended.
Amendments to AASB 13
5 Paragraphs Aus28.1, Aus29.1, Aus29.2 and Aus93.2 are added. Paragraphs 28, 29 and 93 are not amended but are included for reference.
Highest and best use for non-financial assets
…
28 The highest and best use of a non-financial asset takes into account the use of the asset that is physically possible, legally permissible and financially feasible, as follows:
(a) …
(c) A use that is financially feasible takes into account whether a use of the asset that is physically possible and legally permissible generates adequate income or cash flows (taking into account the costs of converting the asset to that use) to produce an investment return that market participants would require from an investment in that asset put to that use.
Aus28.1 Notwithstanding paragraph 28(c), for a non-financial asset of a not-for-profit public sector entity not held primarily for its ability to generate net cash inflows, an asset’s use is financially feasible if market participants (including, but not limited to, other not-for-profit public sector entities) would be willing to invest in the asset’s service capacity, considering both the capability of the asset to be used to provide needed goods or services to beneficiaries and the resulting cost of those goods or services.
29 Highest and best use is determined from the perspective of market participants, even if the entity intends a different use. However, an entity’s current use of a non-financial asset is presumed to be its highest and best use unless market or other factors suggest that a different use by market participants would maximise the value of the asset.
Aus29.1 Notwithstanding paragraph 29, a not-for-profit public sector entity is required to consider whether, for a non-financial asset not held primarily for its ability to generate net cash inflows, the asset’s highest and best use differs from its current use only when, at the measurement date, it is:
(a) classified as held for sale or held for distribution to owners in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations; or
(b) highly probable that the asset will be used for an alternative purpose to its current use, in accordance with paragraph Aus29.2.
Aus29.2 For the purposes of paragraph Aus29.1(b), it is highly probable that the asset will be used for an alternative purpose to its current use when, at the measurement date, all the following conditions are met:
(a) the alternative purpose for the asset is physically possible, legally permissible and financially feasible in accordance with paragraphs 28 and Aus28.1;
(b) the appropriate level of management is committed to a plan to change the use of the asset to that alternative purpose, and an active programme to complete the plan has been initiated;
(c) any approvals required to change the asset’s use have been obtained; and
(d) based on reasonably available information, it is highly probable that the current use of the asset will cease under the plan within one year.
…
Disclosure
…
93 To meet the objectives in paragraph 91, an entity shall disclose, at a minimum, the following information for each class of assets and liabilities (see paragraph 94 for information on determining appropriate classes of assets and liabilities) measured at fair value (including measurements based on fair value within the scope of this Standard) in the statement of financial position after initial recognition:
(a) …
(i) for recurring and non-recurring fair value measurements, if the highest and best use of a non-financial asset differs from its current use, an entity shall disclose that fact and why the non-financial asset is being used in a manner that differs from its highest and best use.
…
Aus93.2 For a non-financial asset of a not-for-profit public sector entity not held primarily for its ability to generate net cash inflows, the information in paragraph 93(i) is required to be disclosed only if the entity has determined that the asset’s highest and best use differs from its current use. Such an entity is required to consider whether this difference exists only when, in accordance with paragraphs Aus29.1 and Aus29.2, at the measurement date, the asset is classified as held for sale or held for distribution to owners in accordance with AASB 5 or it is highly probable that the asset will be used for an alternative purpose to its current use.
6 Paragraph AusC6.1 is added to Appendix C Effective date and transition.
AusC6.1 AASB 2022-10 Amendments to Australian Accounting Standards – Fair Value Measurement of Non-Financial Assets of Not-for-Profit Public Sector Entities amended AASB 13 for application by not-for-profit public sector entities, including adding Appendix F Australian implementation guidance for not-for-profit public sector entities. A not-for-profit public sector entity shall apply those amendments prospectively for annual periods beginning on or after 1 January 2024. Earlier application is permitted. If an entity applies AASB 2022-10 for an earlier period, it shall disclose that fact.
7 Appendix F Australian implementation guidance for not-for-profit public sector entities is added as set out on pages 8–10 of this Standard.
8 Australian illustrative examples for not-for-profit public sector entities is attached to accompany AASB 13 as set out on pages 11–15 of this Standard.
Commencement of the legislative instrument
9 For legal purposes, this legislative instrument commences on 31 December 2023.
Appendix F [FOR AASB 13] Australian implementation guidance for not-for-profit public sector entities
This appendix is an integral part of the Standard. It describes the application of paragraphs 61, 62, 89, B8 and B9 of the Standard. The appendix applies only to not-for-profit public sector entities.
Introduction
F1 AASB 13 Fair Value Measurement incorporates International Financial Reporting Standard IFRS 13 Fair Value Measurement, issued by the International Accounting Standards Board. Consequently, the text of AASB 13 is generally expressed from the perspective of for-profit entities. The AASB prepared this appendix to explain and illustrate the application of the principles of paragraphs 61, 62, 89, B8 and B9 of the Standard by not-for-profit public sector entities in relation to fair value measurement of non-financial assets not held primarily for their ability to generate net cash inflows. This appendix does not apply to for-profit entities or not-for-profit private sector entities or affect their application of AASB 13.
Developing unobservable inputs (paragraphs 61, 62 and 89)
F2 Paragraph 22 requires an entity to measure the fair value of an asset using the assumptions that market participants would use when pricing the asset, assuming that market participants act in their economic best interest. Paragraph 23 states that, in developing those assumptions, an entity need not identify specific market participants.
F3 Unobservable inputs are defined as inputs for which market data are not available and that are developed using the best information available about the assumptions that market participants would use when pricing the asset or liability. Paragraph 87 states that unobservable inputs shall be used to measure fair value to the extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Paragraph 89 states that, in developing unobservable inputs, an entity:
(a) may begin with its own data, but it shall adjust those data if reasonably available information indicates that other market participants would use different data or there is something particular to the entity that is not available to other market participants (eg an entity-specific synergy); and
(b) need not undertake exhaustive efforts to obtain information about market participant assumptions.
F4 Various non-financial assets of not-for-profit public sector entities not held primarily for their ability to generate net cash inflows, especially some that are specialised, do not have observable market selling prices or other observable market data because entities seldom sell those assets until their economic life has expired (ie there is little market activity for the asset or comparable assets at the measurement date). Consequently, in applying the requirement of paragraph 61 for fair value estimates to maximise the use of relevant observable inputs, it may nonetheless be necessary to develop unobservable inputs to estimate their fair value. Moreover, for assets that are unique to a government, observable evidence of assumptions of other market participants, if any, is unlikely to differ from the entity’s own assumptions.
F5 Accordingly, when applying the principles in paragraphs 61 and 62 to measure the fair value of a non-financial asset of a not-for-profit public sector entity not held primarily for its ability to generate net cash inflows, if both the market selling price of a comparable asset and some market participant data required to measure the fair value of the asset are not observable, the entity shall use its own assumptions as a starting point in developing unobservable inputs and adjust those assumptions to the extent that reasonably available information indicates that other market participants (including, but not limited to, other not-for-profit public sector entities) would use different data.
F6 For the purposes of paragraph F5, exhaustive efforts need not be undertaken
This is an opening excerpt, not the complete document.