Document ID: chunk:federal_register_of_legislation:F2023C00402:reg:97:p13
Version: federal_register_of_legislation:F2023C00402
Segment Type: reg
Provision Reference: reg 97 (pt 13/56)
Character Range: 294805–297880

or type of goods or services to be transferred by that entity over that time period must also be specified.  This is because time does not require an outflow of resources embodying economic benefits (the definition of a liability in the AASB Framework for the Preparation and Presentation of Financial Statements requires an outflow of resources in settlement of the obligation).  Rather, the Board considers that such a condition is, in substance, an indication that the transferor does not intend to make similar future transfers to the entity for a defined period of time.

     BC44            The Board considered whether its view above is consistent with treating as 'sufficiently specific' a not-for-profit entity's promise to provide a service of standing ready to provide an unspecified good or service.  The Board concluded that a promise to provide a service of standing ready to provide an unspecified good or service is substantially different from a condition that a transfer of assets to a not-for-profit entity relates to a particular time period, without any other conditions.  This is because:

          (a)                    standing ready to transfer a specified underlying good or service (eg to make a good available for a customer to use as and when the customer decides) is, of itself, a specifically identifiable service transferred to the customer, even if the underlying good or service is sometimes difficult to identify; and

          (b)                   promises to use transferred assets consistently with the entity's general objectives are not promises to transfer a good or a service.

     BC45            The Board noted the majority of feedback on ED 260 indicated support for the principle described in paragraph BC39.  Some constituents raised concerns about:

          (a)                    linking 'enforceability' with 'sufficiently specific' for grant arrangements could mean many grants do not fall within the scope of AASB 15;

          (b)                   measuring progress toward satisfying a performance obligation would be difficult in many of the arrangements not-for-profit entities enter into;

          (c)                    how to determine whether goods or services are transferred, and if so how to determine when a transfer occurs.  For example, when research is undertaken as part of a research grant, it may be unclear whether, or when, or what type of, a transfer of goods or services occurs; and

          (d)                   determining if a contract is within the scope of AASB 15 if the customer does not receive the promised goods or services because it directs the entity to transfer those goods or services to third parties.

     BC46            In regard to research grants, the Board noted that such grants typically:

          (a)                    require the recipient to undertake a specified research activity, usually on the basis of a proposal in the grant application;

          (b)                   require the researcher to publicly publish their research findings, either in