15RU-012 Removing DRC as a value-in-use measure - KPMG Australia
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15RU-012 Removal of DRC as a value-in-use measure for NFPs

15RU-012 Removal of DRC as a value-in-use measure

With the implementation of AASB 13 Fair Value Measurement, the Australian Accounting Standards Board (AASB) has been considering the relationship between depreciated replacement cost (DRC) under AASB 136 Impairment of Assets and current replacement cost (CRC) as a measure of fair value under AASB 13.


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Exposure Draft 269 Recoverable Amount of Non-cash-generating Specialised Assets of Not-for-Profit Entities (ED 269) proposes to amend AASB 136 to remove the references to using DRC as a measure of value in use for not-for-profit entities. The AASB has determined that the recoverable amount using a DRC approach is expected to be materially the same as CRC valuation.

Entities impacted by this proposal are those not-for-profit entities that recognise non-cash generating assets (which are typically specialised assets) who use DRC as a measure of value in use. ED 269 will not apply to for-profit entities as these entities were not previously able the use of the DRC.

The AASB requested comments on the ED by 16 November 2015.

Key points

  • ED 269 proposes to remove DRC as a value in use measure for not-for-profit entities
  • Expected that CRC will not be materially different to DRC valuation
  • Proposed application date from 1 July 2016
  • Submissions for comment letters are due on 16 November 2015.

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