Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p49
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 49/91)
Character Range: 140767–143940

that would be useful to users.  Many respondents to ED 260 expressed support for no longer basing income recognition requirements on a reciprocal/non-reciprocal transfer distinction as previously specified by AASB 1004, but on requirements based on satisfying a performance obligation.

BC25            Many respondents to ED 260 qualified their support that a resulting Standard would result in financial statements that would be useful to users.  The main concerns raised about the proposals were:

(a)                    the proposals would not fully resolve the current dissatisfaction with existing income recognition requirements as entities would not be able to fully defer income recognition to such time as related expenses are recognised.  The Board noted that responding fully to such concerns would result in liabilities being recognised inconsistent with the Framework for the Preparation and Presentation of Financial Statements and that with no conceptual basis it would be difficult to distinguish which receipts should be deferred and which should not.  In response, the Board decided to add disclosure encouraging entities to disclose information in the financial statements (including on the face of the financial statements) of externally imposed restrictions on an entity.  The Board considered this would go some way to addressing constituent concerns that financial performance is misrepresented to users as it allows preparers to better explain their financial performance to others;

(b)                   the proposals were presented in an overly complicated manner, and consequently the interaction with other Australian Accounting Standards was not necessarily clear.  In response, the Board decided to redraft the pronouncements to clarify the specified requirements when finalising this Standard (and AASB 2016-8), and to add further illustrative examples to illustrate the operation of the Standard, including its interaction with AASB 15 and other Australian Accounting Standards.  As part of this, the Board decided that this Standard should not address the recognition of assets that are already the subject of existing Australian Accounting Standards (see paragraphs BC58–BC59).

BC26            Given the significance of this project to not-for-profit entities, the Board decided to establish a Project Advisory Panel consisting of preparers and advisors.  The Panel provided valuable insights to the AASB during the Board's redeliberations of the ED, enabling the Board to make better informed decisions about whether, and how, to finalise the proposals in ED 260.

BC27            In addition, the Board decided to invite public comment on draft pronouncements incorporating the Board's decisions following completion of its redeliberations.  Draft Standards were issued in September 2016 for public comment primarily seeking feedback on matters constituents considered to be a 'fatal flaw' with the pronouncements.  The Board received seven formal submissions, and also obtained feedback via various presentations and meetings held with other constituents and with Panel members.

Finalisation of ED 260

BC28            Following the