Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p61
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 61/91)
Character Range: 174409–177407

IFRS requirements in this regard to outweigh any additional costs to a not-for-profit entity, having regard to the scale of such transactions in the not-for-profit sector and noting that the modification would improve comparability by requiring consistent accounting for transactions of the same nature.  In its redeliberations, the Board confirmed its view in this regard and decided to finalise its proposals largely as exposed, amended to reflect its revised articulation of the scope of this Standard.  However, in response to feedback about the undue complexity of a resulting pronouncement and to facilitate understanding of the interaction between AASB 1058 and other Standards, the Board decided not to specify measurement requirements in respect of an asset (other than for volunteer services) in AASB 1058, but to reflect these within the specific other Australian Accounting Standards.  Accordingly, this Standard makes consequential amendments to AASB 16, AASB 102, AASB 116, AASB 117, AASB 128, AASB 138, AASB 140 and AASB 141 to extend the requirement to measure assets at fair value (or current replacement cost, in relation to inventories) to include all assets acquired where the consideration for the asset is significantly less than fair value principally to enable the entity to further its objectives.  The Board observed that income may arise on the initial recognition of a broader set of assets under the revised requirements set out in this Standard (including Appendix D) compared to the previous requirements.

BC65            The Board observed that under the revised requirements, a not-for-profit entity may be required to account for certain transactions made on significantly below-market terms and conditions differently to a for-profit entity.  For example, a for-profit entity that negotiates a favourable price to acquire a property will initially measure that asset at the amount of consideration transferred.  In contrast, a not-for-profit entity that negotiates a similar favourable price to acquire property will initially measure that asset at the asset's fair value for transactions where that price was provided to the entity in support of the not-for-profit entity's objectives, and the price is significantly different to the asset's fair value.  The Board noted that this is not in keeping with a strict transaction neutrality policy.  However, the Board considered its revised requirements appropriately reflect the substance of the transaction between a vendor and a not-for-profit entity and that the scale of such transactions in the not-for-profit sector is sufficiently greater than that in the for-profit sector to warrant the adoption of requirements for not-for-profit entities that differ from those for for-profit entities based on IFRS Standards.

BC66            In keeping with its decision not to specify measurement requirements in respect of an asset that is already the subject of an existing Australian Accounting Standard, the Board