Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p58
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 58/91)
Character Range: 166104–169281

issue of these requirements.  The Board was concerned broadening the scope of this project to address transferor accounting would raise issues not addressed in IFRS 15, and therefore delay the finalisation of pronouncements under this project.

BC54            The Board also considered whether the principles in this Standard should be extended to similar transactions of for-profit entities.  The Board noted its policy on IFRS compliance for such entities, and decided not to extend the application of this Standard to these entities.  The Board confirmed its decision as part of its redeliberations on this project, not having received significant contrary feedback in this regard.  Accordingly, the accounting for certain transfers (eg government grants) may differ between that of a for-profit applying AASB 120 Accounting for Government Grants and Disclosure of Government Assistance and a not-for-profit public sector entity applying this Standard.

Recognition and measurement

Approach taken in this Standard

BC55            The Board considered that AASB 1058 should operate on a 'residual' basis, meaning that entities first apply other applicable Australian Accounting Standards to a transaction before recognising income in accordance with AASB 1058.  This approach was exposed in ED 260 and generally accepted.

BC56            To assist readers of AASB 1058 the Board decided to insert common examples of 'related amounts' that could be recognised on the acquisition of an asset.  These include:

(a)                    contributions of equity;

(b)                   revenue or a contract liability arising from a contract with a customer;

(c)                    a lease liability;

(d)                   a financial instrument; or

(e)                    a provision.

BC57            Many respondents to ED 260 expressed support for the inclusion of examples illustrating the interaction of other Australian Accounting Standards with AASB 1058.  The Board considered constituent feedback seeking further specific examples, and improved articulation of how each example illustrates the principles of the Standard.  The Board was conscious that illustrative examples cannot consider all situations, and that the particular circumstances of each transaction must be considered to determine the appropriate accounting treatment.  However, in response to the feedback received, the Board decided to add several further examples to assist users of the Standard to understand the intended operation of the Standard, and to simplify examples proposed in ED 260.

Recognition of assets

BC58            Consistent with the approach taken in AASB 1004, in ED 260 the Board proposed asset recognition requirements for AASB 1058 that arguably overrode the recognition criteria of other Australian Accounting Standards.  Under those proposals, entities would have recognised an asset and measured it at fair value in accordance with the proposed requirements and then subsequently measured that asset in accordance with its applicable Standard.  In its redeliberations on ED 260, the Board noted it was not their intent to override the recognition criteria for an asset