Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p1
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 1/91)
Character Range: 7699–11083

7                     An entity shall apply this Standard to transactions where the consideration to acquire an asset is significantly less than fair value principally to enable the entity to further its objectives, and the receipt of volunteer services, except for:

(a)                    share-based payment transactions within the scope of AASB 2 Share-based Payment;

(b)                   business combinations within the scope of AASB 3 Business Combinations;

(c)                    contracts within the scope of AASB 17 Insurance Contracts;

(d)                   licences outside the scope of AASB 15;

(e)                    income taxes within the scope of AASB 112 Income Taxes; and

(f)                    restructures of administrative arrangements within the scope of AASB 1004.
          Aus7.1 Further to paragraph 7, public sector entities shall not apply this Standard to insurance contracts within the scope of AASB 4 Insurance Contracts or AASB 1023 General Insurance Contracts.

Recognition and measurement

Recognition and measurement of an asset

     8                        Except as set out in paragraphs 18–22, an entity shall apply the requirements of other Australian Accounting Standards (as relevant) to an asset arising from a transaction within the scope of this Standard.  Examples include:

(a)                   AASB 9 Financial Instruments (eg cash received);

(b)                   AASB 16 Leases;

(c)                    AASB 116 Property, Plant and Equipment; and

(d)                   AASB 138 Intangible Assets.

Recognition and measurement of income and related amounts (paragraphs B12–B31)

     9                        On initial recognition of an asset, an entity shall recognise any related contributions by owners, increases in liabilities, decreases in assets, and revenue ('related amounts') in accordance with other Australian Accounting Standards.  For example, related amounts may take the form of:

(a)                   contributions by owners, in accordance with AASB 1004;

(b)                   revenue or a contract liability arising from a contract with a customer, in accordance with AASB 15;

(c)                    a lease liability in accordance with AASB 16;

(d)                   a financial instrument, in accordance with AASB 9; or

(e)                    a provision, in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets.

     10                    Except as set out in paragraphs 15–17, an entity shall recognise income immediately in profit or loss for the excess of the initial carrying amount of an asset over the related amounts recognised in accordance with paragraph 9.

     11                    Appendix F Australian Implementation Guidance for Not-for-Profit Entities of AASB 15 provides guidance on the identification of a contract with a customer in a not-for-profit entity context.  The Appendix also clarifies the measurement of revenue and contract liabilities where the transaction price includes an amount that would otherwise be separately recognised and accounted for as income immediately in accordance with this Standard.

     12                    For the purposes of this Standard, income is determined as the difference between the consideration for an asset and the asset's fair value, after recognising any other related amounts.  An entity applies