Right of Use Assets of Not-for-profit entities (ie Peppercorn leases)

The AICD response did not support the proposals in the ED to temporarily defer the requirement for NFP entities to fair value the right-of-use assets arising from peppercorn leases. Instead, the AICD expressed a preference for the AASB to introduce a permanent option to account for those peppercorn leases existing at the date of transition to the new standards at either fair value or cost with relevant disclosures. In addition, we believe the AASB should consider extending the cost option to all peppercorn lease arrangements, as part of its broader review of the NFP reporting framework.”