Document ID: chunk:federal_register_of_legislation:F2021C00884:reg:44:p6
Version: federal_register_of_legislation:F2021C00884
Segment Type: reg
Provision Reference: reg 44 (pt 6/15)
Character Range: 37726–40766

consistent with the requirements under which not all contributions received would be required to be recognised.

Restructures of administrative arrangements
BC24            The Board considered it timely to amend the requirements in paragraphs 7.4, 7.4.2 and 10.6-10.9.3 of AAS 29 for restructures of administrative arrangements as part of the short-term review of AAS 29 and in light of the existing definition of contributions by owners that is contained in this Standard.  The Board decided to define restructures of administrative arrangements and to specify that they are in the nature of transactions with owners in their capacity as owners to be recognised on a net basis.  In particular, the Board concluded that a transfer of net assets arising as a consequence of a restructure of administrative arrangements is faithfully represented as a distribution to owners by the transferor and a contribution by owners by the transferee.  The Board also noted that this would result in greater consistency in accounting for restructures of administrative arrangements.  The Board concluded that this approach is preferable to the superseded approach whereby transfers need to be designated as contributions by owners at the time of the transfer to be treated as such.  The Board noted that this would result in a significant change in the current AAS 29 requirements as the possibility of treating a transfer as a revenue/expense item would no longer be available, and would give rise to amendments to Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities to make it consistent with this Standard.  Consistent with the short-term nature of the review of AASs 27, 29 and 31, the Board intends making amendments to Interpretation 1038 to make it consistent with this Standard.  In the longer term, the Board intends to undertake a fundamental review of Interpretation 1038.
BC25            The Board concluded that the effect of the requirements should be expanded beyond government departments to include all government controlled not-for-profit public sector entities and for-profit government departments, noting that this would increase the consistency with the scope of Interpretation 1038 which applies to all wholly-owned public sector entities that prepare general purpose financial statements, not just government departments.  This will assist in harmonising requirements and guidance in relation to contributions by owners.  It is not intended that the amended requirements for restructures of administrative arrangements necessarily apply in analogous circumstances.  For example, it is not intended that the amended requirements apply in the accounting for restructures of commonly-controlled private sector entities.
BC26            Although assets and/or liabilities assumed by another entity as a consequence of a restructure of administrative arrangements were not explicitly dealt with in the superseded AASB 1004, the Board concluded that this Standard is an appropriate location for this