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-- What is the fair value of the Taj Mahal or the Statue of Liberty?
Answered by Mr.Sriram Gopalakrishnan on another Forum.
Public assets such as the ones in the question are generally accounted for in the books of Government entities.
Para 9 of Preface to IFRS states that "The International Public Sector Accounting Standards Board (IPSASB) prepares accounting standards for governments and other public sector entities". These standards are issued as IPSAS 1, IPSAS 2, ... and so on.
Accordingly, IPSAS 17 (Property Plant and Equipment) covers these type of assets. These assets fall within the definition of "HERITAGE ASSETS" within IPSAS 17.
Heritage assets are seperately described "because of their cultural, environmental, or historical significance. Examples of heritage assets include historical buildings and monuments, archaeological sites, conservation areas and nature reserves, and works of art."
"Certain characteristics, including the following, are often displayed by heritage assets (although these characteristics are not exclusive to such assets):
(a) Their value in cultural, environmental, educational, and historical terms is unlikely to be fully reflected in a financial value based purely on a market price;
(b) Legal and/or statutory obligations may impose prohibitions or severe restrictions on disposal by sale;
(c) They are often irreplaceable and their value may increase over time, even if their physical condition deteriorates; and
(d) It may be difficult to estimate their useful lives, which in some cases could be several hundred years.
Public sector entities may have large holdings of heritage assets that have been acquired over many years and by various means, including purchase, donation, bequest, and sequestration. These assets are rarely held for their ability to generate cash inflows, and there may be legal or social obstacles to using them for such purposes."
Hence, it may be noted that IPSAS recognizes through (a) to (d) above that practically it may not be possible to measure heritage assets (fair value or otherwise).
Hence a Government has an OPTION not to account for these assets at all. However, even if the Government chooses to account for these assets, it need not apply the measurement requirements. Only disclosure requirements, as necessary, will apply. (As per Paragraphs 9 to 12 of IPSAS 17)
CONCLUSION:
Now, therefore the final asnwer to your question is that there is no requirement under IPSAS 17 to measure these type of assets because inherently, it is not possible to measure them.
Public assets such as the ones in the question are generally accounted for in the books of Government entities.
Para 9 of Preface to IFRS states that "The International Public Sector Accounting Standards Board (IPSASB) prepares accounting standards for governments and other public sector entities". These standards are issued as IPSAS 1, IPSAS 2, ... and so on.
Accordingly, IPSAS 17 (Property Plant and Equipment) covers these type of assets. These assets fall within the definition of "HERITAGE ASSETS" within IPSAS 17.
Heritage assets are seperately described "because of their cultural, environmental, or historical significance. Examples of heritage assets include historical buildings and monuments, archaeological sites, conservation areas and nature reserves, and works of art."
"Certain characteristics, including the following, are often displayed by heritage assets (although these characteristics are not exclusive to such assets):
(a) Their value in cultural, environmental, educational, and historical terms is unlikely to be fully reflected in a financial value based purely on a market price;
(b) Legal and/or statutory obligations may impose prohibitions or severe restrictions on disposal by sale;
(c) They are often irreplaceable and their value may increase over time, even if their physical condition deteriorates; and
(d) It may be difficult to estimate their useful lives, which in some cases could be several hundred years.
Public sector entities may have large holdings of heritage assets that have been acquired over many years and by various means, including purchase, donation, bequest, and sequestration. These assets are rarely held for their ability to generate cash inflows, and there may be legal or social obstacles to using them for such purposes."
Hence, it may be noted that IPSAS recognizes through (a) to (d) above that practically it may not be possible to measure heritage assets (fair value or otherwise).
Hence a Government has an OPTION not to account for these assets at all. However, even if the Government chooses to account for these assets, it need not apply the measurement requirements. Only disclosure requirements, as necessary, will apply. (As per Paragraphs 9 to 12 of IPSAS 17)
CONCLUSION:
Now, therefore the final asnwer to your question is that there is no requirement under IPSAS 17 to measure these type of assets because inherently, it is not possible to measure them.
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