TPP07-01 Valuation of Physical Non-Current Assets at Fair Value

This Accounting Policy provides guidance for valuing physical non-current assets at fair value for general purpose financial reporting, taking into account the unique circumstances of the public sector. The aim is to provide relevant and reliable information for decision making and ensure a consistent approach to asset valuation across the NSW Public Sector.

Many assets in the public sector have few or no alternative uses in the existing socio-political environment and many assets, including infrastructure assets, are specialised. The Policy & Guidelines Paper therefore clarifies the meaning of ‘fair value’ for assets with few or no alternative uses.

The policy also provides practical guidance on valuing:

 Land and buildings, including specialised and general buildings and investment property;

 Specialised plant and infrastructure assets;

 Specialised assets that form part of a cash-generating unit; and

 Heritage assets.

This Policy is applicable to all NSW public sector entities (including Statutory State Owned Corporations) for financial years ending on or after 30 June 2007. The Policy is consistent with the Australian Equivalents to International Financial Reporting Standards (AEIFRS). It supersedes the previous NSW Treasury Policy & Guidelines Paper of the same name (TPP 05-03).

Amendments to TPP 07-01

NSWTC 12/05 Fair Value of Specialised Physical Assets amends TPP 07-1 and allows the option in AASB 116 Property, Plant and Equipment to measure assets, either using the depreciated replacement cost or an income approach, in the absence of market based evidence. This Circular is only relevant to NSW public sector entities with cash generating specialised assets (i.e. mainly for-profit entities).

NSWTC 10/07 Land under roads amends TPP 07-1 and requires all NSW public sector entities to recognise and value all land under roads at fair value. Most land under roads has no feasible alternative use and must be valued at existing use, based on an en globo valuation approach or proxy such as open space land.