Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p72
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 72/91)
Character Range: 204337–207319

service renderer;

(b)                   result in a lack of comparability, as some constituents may contend that all the value in such a contract is attributable to the unrecognised good acquired; while others contend that the value remains with the service rendered (ie the good is an incidental product that the customer does not value in entering the contract).  Yet others may contend that some apportionment is appropriate;

(c)                    be seen as being inconsistent with the Board's decision not to extend the accounting specified by AASB 15 to all transactions of not-for-profit entities, regardless of whether a contract with a customer exists.  The Board could not see a clear distinction why the accounting should differ between transactions that through the conduct of an activity result in incidentally gaining control of intellectual property assets, and an arrangement to deliver services for which income may be recognised immediately in accordance with this Standard; and

(d)                   create confusion as to whether this Standard would allow certain intangible assets to be recognised, where their recognition is otherwise prohibited.

Consequently, the Board decided that the accounting set out in paragraphs 15–17 of the Standard should be limited to transactions that will result in a recognisable non-financial asset controlled by the entity.

BC105        The Board observed that universities (and other not-for-profit recipients of grants to perform research) would need to determine whether the accounting for a grant to perform research is specified by AASB 15 or AASB 1058.  The Board considered its decision to limit the scope of paragraphs 15–17 of the Standard will not result in significant additional costs to affected entities, as the entity would already be required to assess a funding arrangement within the scope of AASB 15 for whether revenue is recognised over time, or at a point in time.

BC106        However, given the significance of grants to conduct research to universities and other not-for-profit recipients, the Board decided to develop several implementation examples to AASB 15 to set out the accounting in this regard.  The examples illustrate scenarios where income would be recognised immediately on gaining control of the financial asset in accordance with this Standard, or recognised over time, or at the end of the agreement, in accordance with AASB 15.  The Board's considerations in this regard are set out in its Basis for Conclusions to AASB 2016-8.

Volunteer services

BC107        AASB 1004 (December 2007) required local governments, government departments, General Government Sectors (GGSs) and whole of government reporting entities to recognise services received free of charge or for nominal consideration, provided the fair value of those services could be measured reliably, and the services would have been purchased if they had not been donated.  The Board decided to carry forward these