Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p53
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 53/91)
Character Range: 152277–155303

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 that are not contracts with customers within the scope of AASB 15, and the Board's decisions with respect to contributions by owners.  The Board's considerations in reaching the conclusions in AASB 2016-8 are set out in the Basis for Conclusions to AASB 2016-8.

Objective

BC34            The Board noted that it had proposed a resulting Standard to address the accounting for inflows of resources arising from donations, grants, taxes, and similar transactions and events.  In finalising this Standard, the Board decided to express the objective of this Standard in:

(a)                    a broader manner, to avoid inadvertently excluding some transactions from the scope of the Standard; and

(b)                   'plainer' language, so that users can clearly understand the purpose of the Standard.

Scope

Income, including revenue, of not-for-profit entities

BC35            The Board considered whether to define the scope of AASB 1058 based on revenue of not-for-profit entities (except revenue within the scope of AASB 15 or another Australian Accounting Standard) or on income of not-for-profit entities arising from inflows of resources.  The Board noted:

(a)                    revenue is defined in AASB 15 as income arising the course of an entity's ordinary activities; and

(b)                   some types of income of not-for-profit entities (such as bequests and other donations, which historically fell within the scope of AASB 1004) can arise from transactions and other events outside the course of an entity's ordinary activities.  Limiting the scope of AASB 1058 to revenue could therefore omit requirements and guidance on potentially significant types of income of not-for-profit entities and only partially meet the objective of this project.

BC36            Accordingly, the Board based its proposals in ED 260 on the concept of income of an not-for-profit entity arising from inflows of resources because, in its view, revenue of not-for-profit entities did not capture all transactions that the Board intended AASB 1058 to provide requirements for.  The Board observed that this does not mean that income recognised in accordance with this Standard is not also revenue of a not-for-profit entity; the extent to which amounts recognised in accordance with this Standard meets the definition of revenue to the entity (that is, income arising the course of an entity's ordinary activities) is a matter of facts and circumstances.

Assets acquired for more than no or nominal cost, but significantly less than fair value

BC37            In ED 260, the Board proposed that, if:

(a)                    a vendor in a transaction in which a not-for-profit entity acquires an asset, or

(b)                   a lessor, in