Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p78
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 78/91)
Character Range: 220837–224047

comprehensive income that is:

(a)                    subject to externally imposed restrictions; and

(b)                   is not subject to any externally imposed restrictions (the 'unrestricted' amount).

Disclosing information about its externally imposed restrictions in this form allows entities to distinguish between 'committed' and 'uncommitted' amounts recognised immediately as income in instances where there is no obligation on the not-for-entity recipient to return assets received in the event the social expectation is not met.  The Board expects this disclosure to alleviate, through communication, the concern that users of a not-for-profit entity's financial statements do not appreciate the "true" financial position and financial performance of the entity, while maintaining the Board's policy on transaction neutrality.  Further, the Board noted by identifying in the Standard that the disclosure may be made on the face of the financial statements (for example, as a subtotal) will avoid ambiguity of whether this is a permissible manner of satisfying the encouraged disclosure.

BC129        The Board discussed whether disclosure about externally imposed restrictions should be required, or merely encouraged.  The Board noted that it had not exposed a proposal in this regard, and accordingly, decided to encourage the disclosure of information in this regard as opposed to requiring entities to make that disclosure.

BC130        In addition, the Board observed that:

(a)                    AASB 107 Statement of Cash Flows requires disclosure of the amount of significant cash and cash equivalent balances held by an entity that are not available for use by its group, together with commentary about these balances;

(b)                   AASB 116 Property, Plant and Equipment and AASB 138 Intangible Assets require disclosure of the existence and carrying amounts of assets whose title is restricted; and

(c)                    AASB 7 Financial Instruments: Disclosures requires disclosure of information that enables users of its financial statements to evaluate the significance of financial instruments for its financial position and performance, and the nature and extent of risks arising from financial instruments to which the entity is exposed at the end of the reporting period.

The Board noted there may be some overlap between the disclosures set out in paragraph 37 of this Standard, and these other Australian Accounting Standards.

Disclosure of parliamentary appropriations and other related authorities for expenditure

BC131        When developing AASB 1004 (December 2007), the Board decided to defer consideration of whether disclosures of parliamentary appropriations should apply to not-for-profit public sector entities other than government departments, given the short-term nature of its project at that time.  The Board noted that in due course, it would consider extending the application of the requirements.

BC132        As part of this project, the Board reviewed the specified disclosures of compliance with parliamentary appropriations and other externally-imposed requirements required of government departments which had been included in AASB