Issue
[1]
The AASB received a request to clarify whether residual value, as defined in AASB 116 Property, Plant and Equipment, includes cost savings from the re-use of a part of an asset by the entity. The issue was raised primarily in relation to infrastructure assets held by not-for-profit public sector entities that are subject to rehabilitation activity over the course of the asset’s useful life. The submitter contended that the definition of residual value is unduly limiting for not-for-profit entities if it does not include such cost savings.