Updates to FAQ 5.3 on Do in-kind benefits only involve goods and services provided by individuals and how should in‑kind benefits be accounted for?

FAQ 5.3 was updated to assist lessees to apply the Standards of GRAP to concessionary leases.

Concessionary leases are leases where lease payments are charged at below market terms and represent services in-kind received by the entity. If this service in-kind is significant to the entity’s operations, it should be recognised when it meets the definition of an asset and satisfies the criteria for recognition. GRAP 13 Leases is applied to the lease payments (if any), and GRAP 23 Revenue from non-exchange transactions is applied to the concessionary component of the lease payment. The service in-kind asset is measured at fair value which can be determined with reference to a market-related lease payment of a comparable asset, less any lease payments due by the entity per the agreement.

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Disclaimer

The article has been prepared by the Secretariat of the ASB for information purposes only. It has not been reviewed, approved, or otherwise acted on by the Board.