Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p52
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 52/91)
Character Range: 149256–152551

the needs of the entity, although the entity may currently have every intention of continuing to use the assets acquired in a designated way;

(f)                    the revised principles are more conceptually consistent with the Framework for the Preparation and Presentation of Financial Statements as they require the recognition of a liability (a contract liability in accordance with AASB 15 or obligation to construct an asset in accordance with this Standard) where an obligation exists.

BC31            The Board noted that while neither the underlying approach exposed nor the scope of the transactions the project was intended to address has changed between ED 260 and the final pronouncements, in response to the feedback received, it had amended or clarified various proposals in ED 260, and finalised them in a form different to that exposed.  More significant changes from the ED include:

(a)                    asset recognition requirements to be specified only by other Australian Accounting Standards.  However, the Board observed this Standard makes consequential amendments to other Standards to extend the requirement to measure recognised assets at fair value (or current replacement cost, in relation to inventories) on initial recognition to a broader range of assets;

(b)                   AASB 1058 to specify requirements for an in-substance transfer of a non-financial asset to the entity for its own use;

(c)                    additional disclosures;

(d)                   additional transitional provisions;

(e)                    additional guidance and illustrative examples; and

(f)                    deferral of the effective date.

BC32            The Board considered that, overall, its decisions on this project have not significantly departed from those exposed in a manner that adversely affects entities applying the Standard.  The Board decided to finalise its proposals exposed in ED 260 by:

(a)                    issuing AASB 1058 to address the accounting for income of not-for-profit entities.  The Standard establishes principles for not-for-profit entities that apply to transactions where the consideration to acquire an asset is significantly less than fair value principally to enable a not-for-profit entity to further its objectives, and to the receipt of volunteer services;

(b)                   issuing AASB 2016-8 Amendments to Australian Accounting Standards – Australian Implementation Guidance for Not-for-Profit Entities to add implementation guidance and illustrative examples to AASB 15 to assist not-for-profit entities in applying the Standard.  In addition, AASB 2016-8 adds implementation guidance to AASB 9 on the initial measurement and recognition of non-contractual receivables arising from statutory requirements;

(c)                    retaining AASB 1004 Contributions, amended to exclude transactions now addressed by AASB 1058; and

(d)                   issuing AASB 2016-7 Amendments to Australian Accounting Standards – Deferral of AASB 15 for Not-for-Profit Entities to defer the effective date of AASB 15 for application by not-for-profit entities.

BC33            The remainder of this Basis for Conclusions primarily focuses on issues pertaining to transfers of resources to a not-for-profit entity