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To achieve greater consistency across local governments, DLGSC’s advice is that land should be valued using the market approach in AASB 13 Fair Value Measurement, plus, if the land has any public sector restrictions (including from current use for community purposes) over it, the restrictions must be considered when valuing the land.

The AASB has issued AASB 2022-10 Amendments to Australian Accounting Standards – Fair Value Measurement of Non-Financial Assets of Not-for-Profit Public Sector Entities to amend AASB 13 for application by not-for-profit public sector entities, which will apply prospectively to annual periods beginning on or after 1 January 2024.

After careful consideration and evaluation, DLGSC’s advice is that early adoption of AASB 2022-10 is not supported at this time.

This decision is based on several factors and considerations, aiming to ensure a smooth and effective transition.

While DLGSC understands the potential benefits and eagerness to adopt the new accounting standard ahead of its mandatory implementation date, DLGSC has identified certain challenges and complexities that may arise from early adoption.

These challenges could adversely affect the accuracy, consistency and comparability of financial reporting across different local government entities.

DLGSC is seeking to consult with sector bodies to review the assessment of fair value and what further guidance may be required.

Please adhere to the existing accounting standards until the mandatory implementation date of AASB 2022-10. This will allow all entities to align their processes, systems and reporting frameworks appropriately.