The Australia Accounting Standards Board (AASB) has introduced a significant update with the AASB 2022-10 standard, focused on the fair value measurement of non-financial assets held by not-for-profit public sector entities.
This standard is designed to improve public sector asset valuations’ transparency, consistency and accountability, aligning them more closely with private sector practices. Understanding these updates is crucial for professional valuers to ensure compliance and deliver accurate, defensible valuations.
Key updates to AASB 2022-10
AASB 2022-10 emphasises valuations to market participant assumptions, rather than entity-specific considerations. This means that valuers must now assess how an asset might be used by a typical market participant, not just the current owner. This change requires a more comprehensive understanding of market conditions, potential uses, and restrictions tied to public sector assets.
The new standard also focuses on specialised public assets, such as restricted use land, buildings (including heritage or historical buildings) and infrastructure assets. These often have limited or no comparable market transactions, making their valuation more complex. Valuers must now use innovative methods to accurately determine their Fair Value.
Additionally, the standard enhances disclosure requirements. Valuation reports must now include detailed explanations of methodologies, assumptions and key data inputs, ensuring that stakeholders can fully understand the valuation process.
What are the challenges for valuers?
While the updates improve the quality and reliability of public sector valuations, they also introduce new challenges. There are limited or no market comparables for many public sector assets, forcing valuers to rely on advanced techniques and market modelling.
The legal or operational restrictions tied to many of these assets further complicate the valuation process. Compliance with enhanced disclosure requirements also demands additional time and expertise, as valuers must provide detailed justification for their approaches and assumptions. These challenges underscore the need for valuers to stay ahead of industry best practices more specifically having the appropriate technical expertise, experience and qualifications .
AVA supports public sector valuations
Asset Valuation Advisory (AVA) brings decades of experience in public sector asset valuation. Our expertise includes working with highly specialised and restricted-use assets, enabling us to deliver precise and compliant valuations.
Our approach is tailored to the requirements of AASB 2022-10, ensuring that our clients meet regulatory obligations while maintaining transparency, accountability and support our clients through the audit review process.
Preparing for the future
Adopting AASB 2022-10 signals a more rigorous era for public sector valuations.
The standard gives stakeholders greater confidence in valuation outcomes by emphasising market-driven assumptions and enhanced disclosure.
To navigate these changes effectively, public sector entities and valuers alike need expert guidance. Contact Asset Valuation Advisory today to ensure your valuations are accurate, compliant and robust through the audit process to meet the latest standards.