Date posted: 15/03/2022

Submission on Narrow scope amendments to AASB 1058

Joint submission supports concessionary leases relief but other amendments should await the post-implementation review

In a joint submission, CPA Australia and CA ANZ have supported the AASB’s proposal to provide certainty to the not-for-profit (NFP) private sector by making permanent, the temporary exemption that allows entities to choose cost or fair value as a valuation method for concessionary leases. As noted in our submissions to the AASB when the temporary exemption was first proposed, many stakeholders face considerable challenges in obtaining fair value information for concessionary leases which cannot be justified on a cost/benefit basis. The current disclosure requirements in AASB 16 are considered to be adequate when communicating information about these arrangements in the financial statements.

The submission also agreed that the ongoing work by the AASB on public sector fair value measurement and by the International Public Sector Accounting Standards Board on public sector concessionary leases is of sufficient importance to justify retaining the temporary status of the exemption for public sector NFPs until this work is completed.

However, the submission did not support the AASB’s proposals to amend or develop further illustrative examples in AASB 1058 and AASB 15. Our stakeholders were of the view that the new and amended examples were likely to confuse rather than clarify the relevant principles. Instead, the submission argued that the AASB, and its stakeholders would be better served by the devoting their resources to the completion of the forthcoming post-implementation review of AASB 1058, which is both important and necessary to ensure the underlying concerns of our members and other stakeholders with the requirements of this standard are addressed more holistically.


Illustrative examples for income of not-for-profit entities and right of use assets arising under concessionary leases

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Insights from the implementation of AASB 1058

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