Measurement of non-financial assets at current operational value

Mariam Vardiashvili

doi:10.37075/FABA.2025.1.09

Authors

Mariam Vardiashvili Ivane Javakhishvili Tbilisi State University, Georgia https://orcid.org/0009-0007-4745-9336

DOI:

https://doi.org/10.37075/FABA.2025.1.09

Keywords:

measurement, current value, fair value, operating assets, current operational value

Abstract

Purpose: In public sector entities, non-financial assets may provide either economic benefits or service potential, depending on their intended use. This distinction influences the selection of an appropriate measurement method. Measuring non-financial assets intended to provide services – rather than generate revenue – has long been a challenge in the public sector. To address this issue, the International Public Sector Accounting Standards Board (IPSASB) introduced changes to the Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities and, in May 2023, issued a new standard: IPSAS 46 – “Measurement.” As part of these changes, IPSASB revised the concept of “current value” by introducing two new bases into the IPSAS framework: fair value and current operational value. The purpose of this research is to review the newly developed measurement base – current operational value – and analyze its significance and impact on financial statements. The objectives of the research are: (1) To examine the various measurement methods; and (2) To analyze the circumstances under which non-financial assets are measured using this method.

Design/Methodology/Approach: To achieve the objectives of the study, a combined approach was employed, incorporating a structured review, scientific literature analysis, and empirical data collection.

The structured review involved the analysis of international standards and guidelines related to asset valuation. Scientific articles were identified and reviewed using the Google Scholar platform. Empirical data were collected through a telephone survey involving 45 respondents, including representatives from the State Treasury, public sector organizations, and academia.

Findings: This paper highlights the key issues related to the measurement of assets in the public sector. It analyzes the factors that have led to changes in the measurement of financial statement elements under IPSAS.

The paper presents the concept of current operational value, its measurement approach, and the significance of this method in enhancing the qualitative characteristics of financial statements.

Practical Implications: By highlighting new trends in the measurement of non-financial assets, this research contributes to the understanding of asset measurement challenges in the public sector and their practical application.

Originality/Value: This study explores the challenges associated with the use of current operational value and its impact on asset valuation in the public sector.

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