Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p48
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 48/91)
Character Range: 138010–141052

the customer pays consideration for the good or service.  Consequently, the Board decided that the principles in AASB 15 on performance obligations should apply to any entity, whether for-profit or not-for-profit, in the private sector or public sector.

BC20            Overall, the Board considered the financial reporting of not-for-profit entities would be best improved by, as a starting point, aligning the applicable recognition and measurement principles with the principles of AASB 15, and drawing on the guidance available in IPSAS where not inconsistent with Australian Accounting Standards.  This is in keeping with the Board's policy on transaction neutrality.

Issue of ED 260

BC21            The Board's proposals with respect to the accounting for income of not-for-profit entities finalised in this Standard were exposed for public comment in April 2015 as part of ED 260 Income of Not-for-Profit Entities.  In developing ED 260, the Board considered both the feedback received on ED 180 and the requirements of AASB 15.  ED 260 proposed both revisions to the income recognition principles in AASB 1004, and development of guidance and illustrative examples to assist not-for-profit entities in implementing AASB 15.

BC22            Part B of ED 260 proposed the issue of a draft Standard establishing the principles that a not-for-profit entity shall apply to report useful information to users of financial statements about the nature and amount of assets, liabilities, income and cash flows arising from inflows (or net inflows) of resources from donations, grants, taxes, and similar transactions and events.  The ED proposed that income is immediately recognised for the excess of an asset acquired over any related liabilities or contributions by owners.  Related liabilities include contract liabilities arising in a contract with a customer within the scope of AASB 15.

BC23            In June 2015, the Board held roundtables in Melbourne, Canberra, Brisbane and Sydney to seek feedback on its proposals set out in ED 260.  The ED proposals were also presented at various forums, workshops and discussion groups.  In addition, the Board conducted targeted meetings to help ensure the Board understood the implications of its proposals to entities with different not-for-profit objectives (for example, charities and local governments).

BC24            The Board received feedback on its proposals through receipt of 34 formal comment letters on ED 260.  The Board also obtained feedback via means such as email, meetings with constituents, presentations to various bodies and social media.  About half the respondents to the Exposure Draft explicitly considered that overall, the proposals would result in financial statements that would be useful to users.  Many respondents to ED 260 expressed support for no longer basing income recognition requirements on a reciprocal/non-reciprocal transfer distinction as previously specified by AASB 1004, but on requirements based on satisfying a performance obligation.