What are an entity’s considerations on a right of use of land?

The Public Sector Accounting Forum (PSAF) considered accounting for an entity’s right of use of land. Preparers are unsure whether they control land that they have a right to use  without an arrangement. Where no consideration is payable (sometimes linked to the absence of an arrangement), other Standards may also apply  such as in-kind benefits in GRAP 23 on Revenue from Non-exchange Transactions (Taxes and Transfers) and intangible assets.

The PSAF noted that entities should consider the legislative environment, which may give certain rights and responsibilities to entities for land. In the absence of an arrangement (including rights in legislation), it is unlikely  that an entity would be able to conclude they control land or have a long-term right to use land. An entity may still have a short-term right-of-use asset that is consumed. In this instance, an entity recognises an in-kind benefit and related expense in GRAP 23.