Document ID: chunk:federal_register_of_legislation:F2023C00402:reg:97:p17
Version: federal_register_of_legislation:F2023C00402
Segment Type: reg
Provision Reference: reg 97 (pt 17/56)
Character Range: 305847–308920

customer and allocated to a performance obligation using the residual approach should be considered for appropriateness in the context of the allocation objective.  If a donation element is allocated to a performance obligation in this manner it might result in the transaction price being inappropriately overestimated.

     BC57            The Board concluded the revised approach addressed constituent feedback on the two-step model it proposed in ED 260.  In particular, the rebuttable presumption does not require entities to consider the customer's intent when entering into a contract with the entity.  To help ensure the rebuttable presumption was practicable, the Board sought feedback on this approach from its Project Advisory Panel.  The Panel supported the revised approach, and consequently the Board decided to finalise the rebuttable presumption.  The presumption ultimately applies the Board's view exposed in ED 260 that separate components of a contract should be accounted for in accordance with the applicable Standard using the revised guidance.

Materiality
     BC58            The Board proposed in ED 260 that an assessment of whether a component not attributable to the goods or services promised by the entity in its contract with a customer is material should be made at a contract level and not reassessed at another unit of account, such as for a portfolio of similar contracts.  The Board considered this approach would likely achieve a better balance of costs and benefits than if the materiality of such components were to be assessed at the portfolio level of similar contracts.  In its redeliberations, the Board decided to confirm its approach to assessing the materiality of such components within contracts with customers because of the balance between costs and benefits that it provides.

Disclosures
     BC59            As part of the Board's review of AASB 15 it also considered whether not-for-profit entities should be exempted from any disclosure requirements in AASB 15.  The Board considered those disclosures in the context of the Tiers of Australian Accounting Standards.  Specifically, not-for-profit entities (other than the Australian Government and State, Territory and Local Governments) are not required to comply with Tier 1 reporting requirements in their general purpose financial statements in accordance with AASB 1053 Application of Tiers of Australian Accounting Standards.  Those entities may choose to apply Tier 1 reporting requirements but are otherwise required to only comply with Tier 2 reporting requirements in their general purpose financial statements.  The Board observed its policy for developing Tier 2 reporting requirements specifically considers the nature and characteristics of not-for-profit entities.  Consequently, the Board decided it had already considered any not-for-profit entity-specific disclosure issues in AASB 15 as part of its process for developing Tier 2 reporting requirements for that Standard.  Accordingly, the Board decided not to make any amendments to the disclosure