Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p57
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 57/91)
Character Range: 163320–166379

of AASB 15 from this Standard.  The Board noted that not-for-profit entities with such licences should develop an accounting policy in accordance with AASB 108, and that this policy could extend to applying the accounting set out in AASB 1058 by analogy.

BC49            The Board noted that the requirements of AASB 1058 could be interpreted to apply to restructures of administrative arrangements, which are addressed in AASB 1004 (see paragraph BC173 below).To avoid confusion as to which Standard applies to these transactions, the Board decided to exclude them from the scope of AASB 1058.

Terminology

BC50            NFP entities might acquire, or obtain, an asset in a number of circumstances.  Various terms are commonly used to describe acquisitions of assets under terms and conditions that also provide a significant benefit to an entity, including 'grant', 'donation', 'bequest', 'assistance' and 'endowment'.  These terms are not necessarily synonymous but are at times used interchangeably.  Therefore, while these terms might be familiar to not-for-profit entities the Board decided not to develop accounting requirements based upon them.

BC51            When considering the underlying transactions associated with the above terms the Board observed the term used for a particular transaction is not important; rather, it is the characteristics or substance of the transaction that should determine the appropriate accounting.  Accordingly, the Board decided to express the principles in AASB 1058 as far as possible without reference to such commonly used terminology.

BC52            However, the Board noted in order for AASB 1058 to remain accessible to preparers and other users, it could not completely avoid the use of such terms, especially in guidance material accompanying the Standard.  Accordingly, the Board decided to clarify in AASB 1058 that an entity considers the substance, rather than the form, of transfers of resources to a not-for-profit entity for consideration significantly less than fair value principally to enable the entity to achieve its objectives  in identifying the applicable requirements of AASB 1058.

Extending the scope to not-for-profit transferors and for-profit entities

BC53            The Board considered whether the scope of its project should be extended to address the accounting by not-for-profit transferors in arrangements giving rise to inflows of resources to a not-for-profit entity.  The Board decided not to address this issue as part of the current project for the following reasons:

(a)                    the Board aims to address not-for-profit specific requirements for a topic as promptly as possible after an IFRS Standard for a similar topic is issued; and

(b)                   to ensure timely issue of these requirements.  The Board was concerned broadening the scope of this project to address transferor accounting would raise issues not addressed in IFRS 15, and therefore delay the finalisation of pronouncements under this project.

BC54            The Board also