Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p59
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 59/91)
Character Range: 169026–171984

in accordance with the proposed requirements and then subsequently measured that asset in accordance with its applicable Standard.  In its redeliberations on ED 260, the Board noted it was not their intent to override the recognition criteria for an asset in other Standards when proposing asset recognition criteria be included in this Standard.

BC59            Having regard to the above, the Board decided not to proceed with the asset recognition requirements it proposed in ED 260 (other than for volunteer services).  Accordingly, this Standard does not specify asset recognition criteria or the guidance on control that had been proposed in ED 260.  Instead, the Board decided to clarify consequential amendments to other Standards that specify the initial measurement requirements for transactions within the scope of AASB 1058 and to direct that this Standard applies to assets recognised in accordance with other Australian Accounting Standards, where that asset had been acquired for consideration that is significantly less than fair value principally to enable the entity to further its objectives.

Measurement of assets

BC60            As noted in paragraph BC7, various Australian Accounting Standards presently require a not-for-profit entity to recognise assets received at fair value (or current replacement cost, in relation to inventories) where the asset had been acquired for no or nominal consideration.  Part of the Board's reason for undertaking this project was to address the perceived gap in the accounting for transactions where an asset has been acquired for reduced consideration that is more than a nominal amount; the reduced consideration representing a donation (or other transfer) to the entity to further its objectives.

BC61            The Board considered that, generally, assets and liabilities of not-for-profit entities arising from transactions within the scope of a pronouncement resulting from this project should initially be measured in accordance with the measurement requirements of any other Standard applying to that class of assets or liabilities (for example, AASB 9, AASB 15 or AASB 116), because there is not a not-for-profit-entity-specific reason to depart from those measurement requirements.  However, the Board considered that, if a vendor, in a transaction in which a not-for-profit entity acquires an asset, or a lessor, in a finance lease entered by a not-for-profit entity, makes a donation in the sale or lease contract, the not-for-profit entity should measure the cost of the asset at fair value with a corresponding amount recognised as income (assuming there are no related amounts to recognise on the transaction in accordance with paragraph 9 of the Standard).  The Board noted that this view is consistent with the requirement in paragraph 66 of AASB 15 for an entity to measure any non-cash consideration at fair value to determine the transaction price in respect of a contract in