Should all heritage assets be accounted for in the same way?

Heritage assets are generally expected to be held indefinitely, and are managed and preserved for current and future generations. Some entities use heritage assets for other activities or to provide services as part of their day-to-day operations (i.e. a dual purpose). This will typically be a building that has a significant historical association and that is also used as an administrative building by an entity.

GRAP 103 on Heritage Assets currently requires that a dual purpose asset should not be accounted for using GRAP 103. Instead, the asset should be accounted for using the applicable Standard of GRAP, for example GRAP 17 on Property, Plant and Equipment, depending on the reason for having or holding the asset.

If all heritage assets are not presented as a single line item in the financial statements, will it distort the reason for having or holding heritage assets? And will government be able to consolidate the total value of the country’s heritage estate if all heritage assets are not presented together?

It was these questions that resulted in the ASB reconsidering the accounting for dual purpose heritage assets. The ASB agreed that the objective for holding heritage assets is their preservation, and that presenting all heritage assets as a single line item, will be helpful for accountability and decision-making. As a result, the ASB proposes amending the accounting for dual purpose heritage assets. ED 195 on Proposed Amendments to the Standard of GRAP 103 on Heritage Assets proposing that:

• all heritage assets should be accounted for using GRAP 103, irrespective of whether they have a dual purpose. All heritage assets should be presented together, as a single line item on the face of the statement of financial position;
• information about the heritage asset’s dual purpose should be provided in a disclosure note (if material); and
• heritage assets should be tested for impairment if an impairment indicator has been triggered.

Do you agree with the proposed amendments?

Share your thoughts by accessing ED 195 following this link.

This has been prepared by the Secretariat of the ASB and not the Board.