Document ID: chunk:federal_register_of_legislation:F2019N00027:body:0:p9
Version: federal_register_of_legislation:F2019N00027
Segment Type: other
Provision Reference: 
Character Range: 21411–24201

point in the future. Therefore, stakeholders have sought clarification on whether these type of incentives are intended to be included in the definition of Issuer Receipts. In the Bank's view, the inclusion of the value of these types of incentives in Issuer Receipts is clearly in line with the purpose and intent of the standards. In view of this, and to address stakeholder feedback, the Bank is proposing to modify the standards to clarify that non-financial benefits provided at a discount or for no consideration are captured in the definition of Issuer Receipts.[14], [15]
Whereas valuation of cash and cash-like flows is generally straightforward, valuation of benefits provided as goods or services can present some challenges. Two broad scenarios are relevant for treatment under the standards:
    * Where goods or services are provided to an issuer at a discount – here, for calculating net compensation, the incentive amount to be recorded as an Issuer Receipt is the value of the discount (e.g. if the service has a usual price of $100 but the issuer is charged only $80 by the scheme, then the discount would be $20). This is consistent with the current standards, which already include 'discount' in the definition of 'Benefit'. [16]
    * Where goods or services are provided for no financial consideration – here, for calculating net compensation, the incentive amount is the value of the goods or services (another way of expressing this would be to characterise it as a '100 per cent discount').
The Bank notes that any methodology used to determine the value of such incentives must be consistent with the purpose and intent of the standards.[17] The Bank's preliminary expectation is that this means entities should use the fair (or market) value of the goods and services provided to determine the value of the incentive; fair value could be arrived at by following the principles of the 'fair value measurement' approach under relevant accounting standards, which focus on the estimated price that would be achieved to sell an asset in an orderly transaction in the principal (or most advantageous) market (e.g. AASB 13 Fair Value Measurement[18]).[19] Schemes and issuers may need to independently estimate the fair value of a non-financial benefit provided. The Bank may require schemes and issuers to substantiate their estimates of fair value and the key assumptions underlying their estimates.

Proposal 4:
Clarify the standards with the effect that where there is a price at which the supplier is regularly supplying relevant property or services, any discount or deduction from that price that meets the incentive test is a benefit to be included in Issuer Receipts.

Proposal 5:
Clarify the standards with the effect that where property or services are