Right of Use Assets of Not-for-profit entities (ie Peppercorn leases)

Thursday, 06 December 2018

On 7 December 2018 the AICD responded to an Exposure Draft (ED) issued by the Australian Accounting Standards Board (AASB) ED 286 – Amendments to Australian Accounting Standards – Right-of-use Assets of Not-for-profit entities.


The AICD response did not support the proposals in the ED to temporarily defer the requirement for NFP entities to fair value the right-of-use assets arising from peppercorn leases. Instead, the AICD expressed a preference for the AASB to introduce a permanent option to account for those peppercorn leases existing at the date of transition to the new standards at either fair value or cost with relevant disclosures. In addition, we believe the AASB should consider extending the cost option to all peppercorn lease arrangements, as part of its broader review of the NFP reporting framework.”

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