Document ID: chunk:federal_register_of_legislation:F2021C00884:reg:44:p10
Version: federal_register_of_legislation:F2021C00884
Segment Type: reg
Provision Reference: reg 44 (pt 10/15)
Character Range: 48995–51927

example, AASB 116 Property, Plant and Equipment and AASB 138 Intangible Assets).  The Board perceived there to be a gap in the accounting for those transactions where an asset has been acquired for consideration that is below market but is more than nominal.  The Board noted that under existing recognition and measurement rules at that time, an entity would likely not have recognised any income on the transaction, but measured the asset acquired at the amount of the consideration transferred.  The Board considered that, in many instances, such transactions were unlikely to be conceptually different to those for which no consideration was transferred, and consequently decided to also consider the accounting for such transactions as part of this project.

     Previous stages of this project
BC8 In previous stages of this project, the Board had previously exposed proposals on income recognition requirements for similar transactions as part of the following Exposure Drafts:
(a) ED 125 Financial Reporting by Local Governments (October 2003).  This ED also addressed other issues;
(b) ED 144 Proposed Guidance to accompany AASB 1004 Contributions (November 2005);
(c) ED 147 Revenue from Non-Exchange Transactions (Including Taxes and Transfers) (February 2006); and
(d) ED 180 Income from Non-exchange Transactions (Including Taxes and Transfers) (June 2009).
BC9 However, having regard to constituent feedback and developments in accounting internationally subsequent to the issue of each such Exposure Draft, the Board had decided not to finalise those previous Exposure Drafts.  The last such Exposure Draft, ED 180, was closely based on IPSAS 23 Income from Non-exchange Transactions (Taxes and Transfers).  At that time, the Board decided, having regard to feedback received on the ED and the progress the IASB was making on a project to replace IAS 18 Revenue, not to finalise the proposals set out in ED 180, but instead to refocus its project following issue of IFRS 15 Revenue from Contracts with Customers.

     Alternative approaches considered
BC10 In developing this Standard, the Board considered whether to base the income recognition and measurement principles for a not-for-profit entity on those set out in:
(a) AASB 1004 Contributions;
(b) IPSAS, including IPSAS 23;
(c) AASB 120 Accounting for Government Grants and Disclosure of Government Assistance; or
(d) AASB 15 Revenue from Contracts with Customers.
BC11 The Board decided not to develop proposals based on the accounting specified by AASB 1004 (as in force at that time), having regard to constituent feedback leading to the Board undertaking the project.  In addition, the Board observed that the approach in AASB 1004 does not acknowledge that a non-reciprocal transfer may be made on terms and conditions representative of a liability as defined in the Framework for the Preparation and Presentation of Financial Statements.
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     Issue