Document ID: chunk:federal_register_of_legislation:F2021C00884:reg:44:p7
Version: federal_register_of_legislation:F2021C00884
Segment Type: reg
Provision Reference: reg 44 (pt 7/15)
Character Range: 40490–43552

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another entity as a consequence of a restructure of administrative arrangements were not explicitly dealt with in the superseded AASB 1004, the Board concluded that this Standard is an appropriate location for this material as it is the Standard that is best suited to dealing with contributions, including contributions by owners, to not-for-profit reporting entities and for-profit government departments.
BC27            In addition, in accordance with its decision to issue AASB 2005-6 Amendments to Australian Accounting Standards [AASB 3], the Board concluded that AASB 3 Business Combinations is not an appropriate Standard in which to locate specific requirements relating to restructures of administrative arrangements because business combinations involving entities or businesses under common control are now excluded from the scope of AASB 3.  However, a cross-reference from AASB 3 to AASB 1004 is provided to assist in understanding the relationship between the two Standards.
BC28            The Board also concluded that it is not necessary at this time to explicitly address the measurement basis to be adopted for transferred assets and liabilities due to a restructure of administrative arrangements.  An asset acquired by a government controlled not-for-profit entity or a for-profit government department as a consequence of a restructure of administrative arrangements is considered to be a contribution by owners.  Not specifying the measurement basis is consistent with Interpretation 1038, which also does not specify the measurement basis to be adopted with respect to contributions by owners or distributions to owners.  In addition, AASB 3 does not address the measurement issue for a restructure of entities under common control.  The Board also noted that measurement requirements in AASB 116 Property, Plant and Equipment (including paragraph Aus15.1) do not apply to assets transferred under a restructure of administrative arrangements because they are acquired by the transferee as part of a business.  The Board acknowledges that, as the proposed amendments do not specify the measurement basis to be adopted, assets and liabilities transferred in the course of a restructure of administrative arrangements could be measured at fair value or book value.
BC29            The Board noted that the scope of the requirements relating to restructures of administrative arrangements is limited to the transfer of a business (as defined in AASB 3).  The Board does not intend the requirements to apply where, for example, an individual asset or a group of assets that are not a business are transferred, noting that transfers of an individual asset and a group of assets are scoped out by the definition of a business in AASB 3.

Compliance with parliamentary appropriations and other externally-imposed requirements by government departments
BC30            The Board noted that issues relating to compliance with parliamentary appropriations and other externally-imposed