Document ID: chunk:federal_register_of_legislation:F2023C00402:reg:97:p11
Version: federal_register_of_legislation:F2023C00402
Segment Type: reg
Provision Reference: reg 97 (pt 11/56)
Character Range: 289080–292126

which transferred funds are put, that this constitutes enforceability, as neither party has the ability to unilaterally make decisions regarding the assets transferred.  The Board noted, however, that the guidance is general in nature and, while it is intended to be helpful in assisting entities assess the enforceability of arrangements, it does not constitute legal advice.  Accordingly, the Board noted that, depending on the complexity of the individual facts and circumstances, entities might still need to obtain specific legal advice in regard to their arrangements.

     BC36            The Board also sought feedback from its Project Advisory Panel on the revised guidance on enforceability and observed the feedback was generally positive.  The Panel considered the guidance was useful within the confines of not providing specific legal advice.  Accordingly, the Board decided to finalise its clarifications by including the additional guidance in the final Standard.

Identifying performance obligations
     BC37            The Board noted that a performance obligation in IFRS 15 meets the definition of a liability in the AASB Framework for the Preparation and Presentation of Financial Statements as it requires an outflow of resources in settlement of an obligation.  Accordingly, a key aspect of a performance obligation is that there is a transfer of goods or services to another party that is not at the discretion of the provider.  In a not-for-profit context the Board determined that due to the prevalence of transfers of assets to not-for-profit entities that further guidance on identifying performance obligations was warranted.

Sufficiently specific requirements
     BC38            Some transfers of assets to not-for-profit entities are provided with no, or minimal, terms and conditions regarding how the transferred assets must be used other than that the assets are used for purposes consistent with the entity's service-delivery objectives as set out in its constitution or enabling legislation (where applicable).  For example, a charity may have the discretion to change the goods or services to be provided using donated assets, even when the donations are received in specific-purpose fundraising appeals, to enable the charity to redirect aid to those in greatest need as circumstances change.  Some other transfers to not-for-profit entities are provided solely on condition that the funds are to be expended within a specified time period.  For these reasons, it can be difficult to distinguish goods or services provided to meet this general requirement from any of the not-for-profit entity's other goods or services provided.

     BC39            The circumstances described in paragraph BC38 are much more prevalent in the not-for-profit sector than the for-profit sector, and may raise issues regarding which terms and conditions attached to assets transferred to a not-for-profit entity give rise to performance obligations.  The Board decided to propose a principle in ED 260 that to qualify as