Document ID: chunk:federal_register_of_legislation:F2023C00402:front:0:p81
Version: federal_register_of_legislation:F2023C00402
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Character Range: 211634–214815

licence is granted to the donor.

    Example 4—Research activities—Transfer of research findings

    Example 4A – Enforceable agreement, sufficiently specific performance obligation, research data only

    Research Institute C receives a cash grant from a donor, Marine Sanctuaries Trust M, of $5.3 million to undertake research that aims to track whale migration along the eastern coast of Australia.

    The terms of the grant are:

                    a period of three years;

                    the return of funds that are either unspent or not spent in accordance with the agreement;

                    publication of research data on a public website as it is obtained, so that any researchers can use the data;

                    the IP arising from the research is neither transferred to nor licensed to donor M;

                    annual progress reports and a final report are required;

                    Institute C may publish research results in conference presentations and/or scholarly journals, retaining the copyright to such results; and

                    the institute has an explicit right to payment for the research services completed to date if the agreement is terminated.

    Institute C concludes that the arrangement is a contract with a customer as defined in AASB 15 on the basis that:

                    Institute C's promise of specified research and contemporaneous publication of the research data is enforceable as the grant is refundable if the research is not undertaken;

                    the institute identifies its promise to undertake the research and contemporaneously publish the research data is sufficiently specific and represents a single performance obligation; and

                    the undertaking of the research and contemporaneous publication of the data will represent services provided to the donor, as it is a beneficiary of the research even though the research data is publicly available.

    Accounting treatment

    In accordance with AASB 15, Institute C allocates the cash grant to its identified performance obligation and recognises the financial asset (cash) and a contract liability of $5.3 million on initial recognition.

    Institute C concludes that the performance obligation is satisfied over time as the donor simultaneously receives and consumes the benefits of the research services as they are performed (paragraph 35(a)). This is on the grounds that the research data is made public as it is collected.

    Accordingly, the institute recognises revenue over time as it satisfies the performance obligation. The institute elects to measure its progress towards complete satisfaction of the performance obligation on the basis of research data published.

    Example 4B – Enforceable agreement, sufficiently specific performance obligation, research data and assessment only

    In this example, the facts of Example 4A apply, except that:

                    the grant requires Research Institute C to prepare interim and final reports analysing the tracking data obtained;

                    publication of the research data is required at the conclusion