Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p39
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 39/91)
Character Range: 112666–115678

been purchased if they had not been donated, in order to meet the staff-to-children ratio at all times.

    Accounting treatment

    As the Local Government meets the criteria in paragraph 18, it is required to recognise volunteer services income of $420,000.  The services of the volunteers do not result in the acquisition of an asset, and so an equivalent expense is also recognised.

    The journal entry to recognise the volunteer services for the year is:

      Debit Credit

     Expenses – Preschools – Volunteers 420,000

     Income  420,000

Disclosure

Restrictions (paragraph 37)

IE8                 Example 13 illustrates disclosures about externally imposed restrictions that limit or direct the purpose for which resources controlled by an entity may be used.  Such disclosures are encouraged by this Standard but not required.  This example extends Example 6A to illustrate possible disclosures about time restrictions on the expenditure of grant monies received.  This example illustrates voluntary disclosures about restricted and unrestricted donation income in the Statement of Profit and Loss and Other Comprehensive Income, as well as disclosures relating to restricted net assets.  Example 7B also illustrates voluntary disclosures of restrictions.

    Example 13—Voluntary disclosure regarding restrictions on timing of expenditure

    As per Example 6A, Charity B receives a government grant of $2.4 million on 31 May 20X6, which is refundable if the money is not spent in the period 1 July 20X6 to 30 June 20X7.  The grantor specifies that the grant must be used in accordance with the charity's overall objectives.  The agreement does not specify the services that the grant must be used for.

    Charity B concludes that the transaction is not a contract with a customer as defined under AASB 15.  The charity determines that there are no related amounts to recognise in accordance with paragraph 9 of AASB 1058.  Charity B does not have a liability under AASB 9 for a potential breach of contract, as it has the discretion not to spend the grant money before 1 July 20X6.  Therefore, Charity B recognises income of $2.4 million in accordance with paragraph 10 on 31 May 20X6, on recognition of the financial asset in accordance with AASB 9.

    Voluntary disclosure

    Charity B elects to make the following disclosures in its financial statements for the year ended 30 June 20X6 to identify donations that are subject to some form of restriction in how the charity can use them, such as time restrictions imposed by donors.

     Summary of Statement of Profit and Loss and Other Comprehensive Income of Charity B

     20X6 20X5

     $ $

     Donation income – unrestricted 800,000 700,000

     Donation income – restricted 2,400,000 3,000,000

     Other revenue   850,000   820,000

     Total revenue 4,050,000 4,520,000

     Total expenses 1,700,000 1,300,000

     Total comprehensive income 2,350,000 3,220,000

      Total comprehensive income – unrestricted