State pays unitary service recognition will fall under payments over the term. the requirements of another applicable accounting Economic InfrastructureA PPP standard. that is on a user pays model: Currently the social operator finances and infrastructure PPPs are only constructs the infrastructure recognised on the balance State does not pay for the cost sheet at commercial of the construction, and acceptance. The operator charges asset users and arrangement will need to be recovers the cost of progressively recognised as construction and operation for and when, the asset is the term of the contract. being constructed. This will have the impact of progressively recognising the financial liability and corresponding asset as the asset is being constructed. For economic infrastructure PPP arrangements, that were previously not on balance the standard will require recognition of these arrangements on balance sheet. There will be no impact to net debt, as a deferred revenue liability will be recognised and amortised over the concession term. AASB 17 The new Australian standard 1 Jan 2021 The assessment has Insurance eliminates inconsistencies and indicated that there will be Contracts weaknesses in existing no significant impact for the practices by providing a single public sector. principlebased framework to account for all types of insurance contracts, including reissuance contract that an insurer holds. It also provides requirements for presentation and disclosure to enhance comparability between entities. This standard does not to the not-for-profit public sector entities. The AASB is undertaking further outreach to consider the application of this standard to the not-for-profit public sector. 9.9 Glossary of technical terms The following is a summary of the major technical terms used in this report. Active liquid market Active liquid market refers to any market in which there are many buyers and sellers present and in which transactions can take place with relative ease and low costs.
State pays unitary service payments over the term. Economic InfrastructureA PPP that is on a user pays model: operator finances and constructs the infrastructure State does not pay for the cost of the construction, and operator charges asset users and recovers the cost of construction and operation for the term of the contract. recognition will fall under the requirements of another applicable accounting standard. Currently the social infrastructure PPPs are only recognised on the balance sheet at commercial acceptance. The arrangement will need to be progressively recognised as and when, the asset is being constructed. This will have the impact of progressively recognising the financial liability and corresponding asset as the asset is being constructed. For economic infrastructure PPP arrangements, that were previously not on balance the standard will require recognition of these arrangements on balance sheet. There will be no impact to net debt, as a deferred revenue liability will be recognised and amortised over the concession term. AASB 17 Insurance Contracts The new Australian standard eliminates inconsistencies and weaknesses in existing practices by providing a single principlebased framework to account for all types of insurance contracts, including reissuance contract that an insurer holds. It also provides requirements for presentation and disclosure to enhance comparability between entities. This standard does not to the not-for-profit public sector entities. The AASB is undertaking further outreach to consider the application of this standard to the not-for-profit public sector. 1 Jan 2021 The assessment has indicated that there will be no significant impact for the public sector. 9.9 Glossary of technical terms The following is a summary of the major technical terms used in this report. Active liquid market Active liquid market refers to any market in which there are many buyers and sellers present and in which transactions can take place with relative ease and low costs.