Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p2
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 2/91)
Character Range: 10798–13908

income immediately in accordance with this Standard.

     12                    For the purposes of this Standard, income is determined as the difference between the consideration for an asset and the asset's fair value, after recognising any other related amounts.  An entity applies judgement in determining the extent to which the acquisition of an asset gives rise to income as specified by this Standard or to revenue, a liability or a contribution by owners recognised in accordance with another Australian Accounting Standard.

     13                    An entity might acquire an asset and also recognise related amounts that in total exceed the initial measurement of the asset.  In such cases, the entity shall reassess whether it has appropriately identified and measured all the related amounts.  If an excess remains after restating any related amounts, the entity shall recognise an expense immediately in profit or loss for the excess of the related amounts over the carrying amount of the asset acquired.  An entity does not adjust the excess against the recognised related amounts.

     14                    An entity shall subsequently apply the requirements of other Australian Accounting Standards applicable to the related amounts referred to in paragraph 9.

Transfers to enable an entity to acquire or construct a recognisable non-financial asset to be controlled by the entity

     15                    A transfer of a financial asset to enable an entity to acquire or construct a recognisable non-financial asset that is to be controlled by the entity is one that:

(a)                   requires the entity to use that financial asset to acquire or construct a recognisable non-financial asset to identified specifications;

(b)                   does not require the entity to transfer the non-financial asset to the transferor or other parties; and

(c)                    occurs under an enforceable agreement.

     16                    An entity shall recognise a liability for the excess of the initial carrying amount of a financial asset received in a transfer to enable the entity to acquire or construct a recognisable non-financial asset that is to be controlled by the entity over any related amounts recognised in accordance with paragraph 9.  The entity shall recognise income in profit or loss when (or as) the entity satisfies its obligations under the transfer.

     17                    In such circumstances, the transferor has in substance transferred a recognisable non-financial asset to the entity.  The entity recognises the financial asset received in accordance with AASB 9 and subsequently recognises the acquired or constructed non-financial asset in accordance with the applicable Australian Accounting Standard (eg AASB 116 for property, plant and equipment).  This Standard requires the entity to initially recognise a liability representing the entity's obligation to acquire or construct the non-financial asset and, if applicable, other performance obligations under AASB 15, which involve the transfer of goods or services to other parties.