AASB13 changes mandatory for 2024-25

In Dec 2022 the Australian Accounting Standards Board released AASB2022-10 which covered a range of changes to AASB13 Fair Value Measurement. These changes are mandatory for the 2024-25 financial year and will require significant changes to the way many entities have dealt with valuations and depreciation expense calculations.

The changes cover aspects such as the valuation of restricted land, disaggregation of assets down to ‘part’ level rather than ‘component’ level, the determination of ‘replacement cost’, the calculation of depreciation expense and confirmation that the old ‘Depreciated Replacement Cost’ (DRC) approach is non-compliant as AASB13 requires use of the ‘Current Replacement Cost’ (CRC) method when using the cost approach valuation technique.

Auditors will be assessing compliance against the updated requirements. APV were actively involved in the AASB special project for fair value in the public and not-for-profit sectors which resulted in the update to AASB13. To assist in understanding these changes, APV has prepared this brief technical paper.