Document ID: chunk:federal_register_of_legislation:F2023C00402:reg:97:p14
Version: federal_register_of_legislation:F2023C00402
Segment Type: reg
Provision Reference: reg 97 (pt 14/56)
Character Range: 297565–300688

the Board noted that such grants typically:

          (a)                    require the recipient to undertake a specified research activity, usually on the basis of a proposal in the grant application;

          (b)                   require the researcher to publicly publish their research findings, either in a government report, a research journal or a similar format;

          (c)                    identify the owner of the intellectual property generated by the research activity; and

          (d)                   may involve the licensing of the intellectual property to the grantor, another entity or the general public.

     BC47            The Board observed that the above features of research grants would typically be sufficiently specific but may cause difficulty in measuring progress toward the satisfaction of a performance obligation that is satisfied over time.  The Board noted that paragraphs 39–45 of AASB 15 focus on measuring progress toward satisfying a performance obligation with reference to input methods and output methods.  The Board observed that either of these methods could be problematic to apply in the context of performing research as required by a research grant.  Accordingly, the Board decided to clarify that the undertaking of the research, which may be seen as an activity undertaken on behalf of another party, could constitute a service for the purposes of AASB 15.  For example, the Board noted that the transfer of the intellectual property created by the research to the grantor could represent the transfer of a good or service in satisfaction of a performance obligation.  The Board also decided to add illustrative examples addressing the application of AASB 15 in the case of research grants, considering issues that might arise when the researcher retains the intellectual property, provides a licence to the grantor or other parties, or provides or publishes research findings, such as the recognition of revenue over time or at a point in time.

     BC48            In response to further feedback received on the Exposure Draft, the Board included additional guidance on both 'enforceability' and 'performance obligations'.  In particular the Board clarified:

          (a)                    when a grant could be considered as part of an enforceable agreement (such as if a return obligation exists and other circumstances as set out in BC29–BC36) and how to determine whether the requirements of the grant are sufficiently specific;

          (b)                   the effect of time-period conditions on whether a performance obligation exists;

          (c)                    whether a grant made to a 'single purpose' entity to be used for its sole purpose constituted a performance obligation; and

          (d)                   the recipient of the transferred goods or services need not be the customer identified in the contract for the contract to be within the scope of AASB 15.

     BC49            Consequently, the Board retained in the final Standard the principle that a performance obligation only exists if it is sufficiently