Document ID: chunk:federal_register_of_legislation:F2023C00402:front:0:p63
Version: federal_register_of_legislation:F2023C00402
Segment Type: other
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Character Range: 161130–164304

perspective does not readily translate to a not-for-profit perspective. The appendix does not apply to for-profit entities or affect their application of AASB 15.
F2 AASB 15 provides guidance on the following five elements of a contract with a customer:
          (a)                    identifying a contract (paragraphs 9–21);
          (b)                   identifying performance obligations (paragraphs 22–30);
          (c)                    determining the transaction price (paragraphs 46–72);
          (d)                   allocating the transaction price to performance obligations (paragraphs 73–90); and
          (e)                    recognising revenue (paragraphs 31–45).
F3 This appendix should be read in conjunction with the requirements of this Standard.
F4 This appendix provides guidance to assist not-for-profit entities to determine whether particular transactions or other events, or components thereof, are within the scope of this Standard, in particular in relation to identifying a contract and identifying performance obligations. If a transaction is outside the scope of this Standard, the recognition and measurement of income arising from the transaction may instead be specified by another Standard, for example AASB 1058 Income of Not-for-Profit Entities.

Identifying whether a contract with a customer exists
F5 A contract is an agreement between two or more parties that creates enforceable rights and obligations. If a not-for-profit entity's promise to transfer a good or service is made in an unenforceable arrangement with another party, a contract with a customer does not exist. If a not-for-profit entity's promise to transfer a good or service in an arrangement with another party fails the 'sufficiently specific' criterion discussed in paragraphs F20–F26, a contract with a customer does not exist and the entity shall not treat the promise as a performance obligation in a contract with a customer. Where a contract with a customer does not exist, the not-for-profit entity shall consider whether AASB 1058 is applicable.

Customer
F6 In contracts with customers, the 'customer' is the party that promises consideration in exchange for goods or services that are an output of the entity's ordinary activities. However, in contracts with customers in any sector, the customer might direct that goods or services are to be provided to third-party beneficiaries (including individuals or the community at large) on the customer's behalf. In these contracts:
          (a)                    the customer remains the party that has contracted with the entity for those goods or services and promises consideration in exchange for those goods or services; and
          (b)                   the provision of goods or services to third-party beneficiaries is a characteristic of the promised transfer of goods or services to the customer.
F7 For example, a not-for-profit entity in the private sector may receive consideration from a government for the specified purpose of providing first-aid training free of charge to members of the community. The government is the customer because it has contracted the entity to provide