| The ASB is starting their Measurement Project |
|
|
The Board approved a project brief in September 2023 to develop principles on the measurement for assets and liabilities in the Standards of GRAP. The project will draw from the new IPSAS guidance on measurement and also aim to address other measurement issues on assets and liabilities raised by stakeholders.
The IPSASB made amendments to the measurement principles for assets and liabilities in the IPSAS Conceptual Framework and issued a new IPSAS on Measurement called IPSAS 46. IPSAS 46 provides guidance in a single standard addressing how commonly used measurement bases should be applied in the public sector. The IPSAS includes guidance on fair value and a new current value measurement basis called ‘current operational value’ (COV).
The addition of COV is due to the limitations of applying the fair value measurement basis to assets held for operational capacity. In the public sector, many assets are used for the delivery of services which can result in them not meeting the requirements of fair value, such as being put to their highest and best use. With the introduction of COV, entities are able to apply a measurement basis that is designed to reflect the value of assets held to deliver service potential. COV takes into account the remaining service potential of an asset at the measurement date.
The ASB’s Measurement project will assess the appropriateness of adopting the guidance in IPSAS for the local environment. The output of the project will likely include amendments to the Conceptual Framework for General Purpose Financial Reporting and a new Standard of GRAP on Measurement.
Consultations with stakeholders will be necessary to test whether the adoption of the new measurement principles will be appropriate. Various stakeholders will be consulted during the development of the project. Stakeholders include preparers and users of the financial statements, valuation experts and standard setters. The project is planned over 4 years starting in 2024. |
|
|
|
