South Africa: The Accounting Standards Board seeks input on proposed amendments to standards regarding the measurement of public sector assets held for operational capacity

25 Sept 2024    1 minute read
Accounting Standards Operational Value

In brief

The Accounting Standards Board (ASB) in South Africa seeks comments on the Exposure Draft (ED) by the International Public Sector Accounting Standards Board (IPSASB) proposing amendments to the International Public Sector Accounting Standards (IPSAS) related to the measurement basis for assets held for operational capacity. The primary objective of the ED is to propose amendments to add the current operational value (COV) to relevant IPSAS. The ASB issued an invitation to comment in writing on the ED by 8 November 2024.

Contents

In more detail

The IPSASB published IPSAS 46, Measurement in May 2023, which introduced COV as a new public sector measurement basis for assets held for operational capacity. Following IPSAS 46, the IPSASB analyzed the applicability of COV to other IPSAS. As a result of this analysis, the IPSASB is proposing amendments to add COV to additional provisions of the IPSAS. The following are some of these proposed amendments:

  • IPSAS 12, Inventories. The ED proposes adding COV at the initial measurement for inventories acquired in non-exchange transactions and at subsequent measurement for inventories held for operational capacity.
  • IPSAS 31, Intangible Assets. The Ed proposes adding COV at the initial measurement for intangible assets acquired in non-exchange transactions and at subsequent measurement for intangible assets held for operational capacity when an entity applies the current value model.
  • IPSAS 21. The ED proposes updating the definition of recoverable service amount to the higher of fair value less costs to sell and COV and removing depreciation replacement cost, restoration cost, and service unit approaches from the standard.

In addition to these amendments, the ED proposes:

  • Revising the definition of accounting estimates to align with IPSAS 46 terminology and with International Accounting Standard (IAS) 8 Accounting Policies, Changes in Accounting Estimates, and Errors.
  • Streamlining the terminology used in the current value measurement disclosure requirements in IPSAS by removing the term 'recurring and non-recurring'.

Upon expiration of the comment period on 8 November 2024, comments received will be used in formulating a response to the IPSASB.

Contact Information
Rebecca Thomson
Local Partner at BakerMcKenzie
Johannesburg
Read my Bio
rebecca.thomson@bakermckenzie.com

Copyright © 2024 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.