Appendix C (AASB1059_07-17_COMPjun21_07-21)

This appendix is an integral part of the Standard.

An entity shall apply this Standard for annual reporting periods beginning on or after 1 January 2020. Earlier application is permitted for periods beginning before 1 January 2020. If an entity applies this Standard for an earlier period, it shall disclose that fact.

For the purposes of the transition requirements, the date of initial application is the beginning of the earliest reporting period for which comparative information is presented in the financial statements.

A grantor shall apply this Standard either:

(a) retrospectively to each prior period presented in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors; or

(b) retrospectively by recognising and measuring service concession assets and related liabilities at the date of initial application.

If a grantor elects to apply this Standard retrospectively in accordance with paragraph C3(b), the grantor shall:

(a) measure the deemed cost of a service concession asset (including an existing asset of the grantor reclassified as a service concession asset) at fair value (current replacement cost) at the date of initial application;

(b) measure a financial liability arising under a service concession arrangement at fair value at the date of initial application;

(c) measure a liability representing the unearned portion of any revenue arising from the receipt of a service concession asset under the grant of a right to the operator model at the fair value (current replacement cost) of the related service concession asset at the date of initial application, adjusted by:

(i) deducting the carrying amount of any consideration transferred by the grantor to the operator recognised as an asset;

(ii) adjusting the resulting amount to reflect the remaining period of the service concession arrangement relative to the total period of the arrangement; and then

(iii) deducting any related financial liabilities measured in accordance with paragraph (b);

(d) measure a liability representing the unearned portion of any revenue arising from the receipt of additional consideration from the operator for access to an existing asset of the grantor that has been reclassified as a service concession asset at the proceeds received, adjusted to reflect the remaining period of the service concession arrangement relative to the total period of the arrangement;

(e) recognise any net adjustments to the amounts of assets and liabilities as an adjustment to the opening balance of accumulated surplus (deficiency) at the date of initial application; and

(f) disclose that it has applied this transition approach and information relating to the measurement of the assets and liabilities in support of the disclosure objective in paragraph 28.

Retrospective application of this Standard in accordance with either paragraph C3(a) or C3(b) may require the derecognition or adjustment of any service concession assets and liabilities recognised under previous accounting policies or the initial recognition of service concession assets and liabilities. Any net adjustment on initial application of this Standard is recognised as an adjustment to the opening balance of accumulated surplus (deficiency). If the grantor applies the revaluation model in AASB 116 or AASB 138 as its accounting policy, the net adjustment is included in accumulated surplus (deficiency) and not revaluation surplus.

The initial measurement of service concession assets at fair value (current replacement cost) does not mean that the assets are measured under the revaluation model. Subsequent revaluations are not required unless the grantor applies the revaluation model as its accounting policy.

If a grantor applies this Standard retrospectively in accordance with paragraph C3(b), the measurement of liabilities arising under the financial liability model at the date of initial application is addressed in paragraph C4(b). Paragraph C4(c) addresses liability measurement under both the grant of a right to the operator model and hybrid arrangements, as it requires the measurement of the liability relating to the grant of a right to the operator to exclude any related financial liabilities.

If an entity applies this Standard but does not yet apply AASB 9, any reference in this Standard to AASB 9 shall be read as a reference to AASB 139 Financial Instruments: Recognition and Measurement.

If an entity applies this Standard but does not yet apply AASB 15 or AASB 1058, any reference in this Standard to those Standards shall be read as a reference to AASB 118 Revenue or AASB 1004 Contributions, as appropriate.

If an entity applies this Standard but does not yet apply AASB 16, any reference in this Standard to AASB 16 shall be read as a reference to AASB 117 Leases.