AASB 2022-10: Transforming Public Sector Asset Valuations

Changes are now in effect in how Australian public sector entities value their non-financial assets.

AASB 2022-10 amends AASB 13 Fair Value Measurement, introducing clearer guidance for not-for-profit public sector entities. The standard applies to annual periods beginning on or after 1 January 2024, and is now in full implementation.

Key updates include refined "highest and best use" assessments - entities now only consider alternative uses when assets are held for sale or highly probable to change purpose. The standard clarifies that assets are "financially feasible" when market participants would invest in their service capacity.

For specialized public assets like heritage buildings and restricted land, the guidance provides enhanced cost approach methodologies. Entities must use market participant assumptions rather than entity-specific considerations.

The changes affect property valuations, depreciation calculations, and require more detailed disclosure of methodologies and assumptions. Public sector organizations need to work with their valuers to assess impacts on their financial statements.

These updates bring greater consistency and transparency to public sector asset valuations across Australia.

Australis is fully across the standard and have implemented it across multiple government entities. Contact us if you would like further information.