Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p81
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 81/91)
Character Range: 229512–232465

AASB 15.  The Board noted that in the absence of any transitional provisions in AASB 1058 or amendment to AASB 15, not-for-profit entities would be required to retrospectively apply the requirements of AASB 1058 or AASB 15 (where the transaction is within the scope) to contracts for which the associated inflow of resources had already been fully recognised in accordance with AASB 1004.

BC144        The Board was concerned that this imposed a greater implementation burden on not-for-profit entities compared to for-profit entities.  Consequently, the Board decided to extend the transitional relief in AASB 1058 to permit relief from retrospective application for contracts for which the entity has recognised all of the income in accordance with AASB 1004, to be consistent with the relief available in IFRS 15 for completed contracts.  The Board also additionally amended the definition of a completed contract in AASB 15 to include contracts for which the entity has recognised all of the revenue in accordance with AASB 1004, or revenue in combination with a provision in accordance with AASB 137.  The extent of the relief is dependent on the entity's elections on retrospective application.

BC145        In ED 260, the Board proposed requiring an asset that has been acquired for consideration that is below market but that is more than nominal to be measured at fair value.  The Board decided to finalise the proposal in issuing this Standard (other than with respect to inventory).  However, the Board observed that an entity would not have previously applied AASB 1004 to these transactions, nor recognised any income on the transaction as the asset acquired will generally have been measured at the amount of the consideration transferred.  Accordingly, in the absence of any transitional provisions, a not-for-profit entity will be required to apply the requirements of AASB 1058 retrospectively to such transactions, including determining the fair value (or, in respect of inventory, current replacement cost) of the asset on acquisition.

BC146        In its redeliberations, the Board considered that the costs of applying AASB 1058 retrospectively to all such assets would exceed the benefits of doing so, having regard to the need for an entity to identify and value such assets still existing at reporting date.  Accordingly, the Board determined some form of transitional relief to be appropriate.  The Board decided to consider transitional provisions for leases made on significantly below-market terms and conditions separately from any transitional provisions for other assets.  The Board's considerations with respect to transitional provisions for leases made on significantly below-market terms and conditions is set out in paragraphs BC150–BC153 below.

BC147        With respect to assets other than lease assets, the Board decided not to require a not-for-profit entity to revisit the accounting that previously applied