Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p80
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 80/91)
Character Range: 226665–229757

regard largely as exposed in ED 260.

Reduced disclosure requirements (Tier 2)

BC138        The Board decided, in light of its current project to review the principles underlying Tier 2 reporting requirements, not to specify any reduction in applicable disclosures in making AASB 1058.  Through a separate due process, the AASB will consider whether relief from certain specified disclosure requirements should be provided to entities that adopt Tier 2 Reduced Disclosure Requirements.

Transition

BC139        The Board considered whether it should provide transitional relief to entities on adopting AASB 1058 and decided that, consistent with the IASB's decisions on IFRS 15, some form of transition relief would be appropriate.

BC140        In developing ED 260, the Board observed there did not appear to be any not-for-profit specific reason for AASB 1058 to depart from the general features of the transitional provisions in AASB 15 as arrangements giving rise to income are not specific to not-for-profit entities.  Accordingly, the Board proposed transitional relief on initial application of AASB 1058 be limited to permitting entities the option of recognising the cumulative effect of initially applying AASB 1058 in opening retained earnings (or another component of equity, as appropriate) at the date of initial application of AASB 1058, to be consistent with AASB 15.

BC141        Many respondents were not supportive of the Board's limited proposals in this regard.  In its redeliberations, the Board noted concerns about the absence of any specific transitional provisions:

(a)                    for existing research, donation and grant funded projects;

(b)                   for assets acquired for no cost or a nominal consideration (including "peppercorn" leases where a nominal amount is made as payment to the lessor); and

(c)                    in acknowledgement of the short lead time between issue and implementation of AASB 1058.

BC142        Having regard to the feedback received, the Board decided to confirm its proposal to allow entities an option between fully retrospectively applying the Standard, or recognising the cumulative effect of initially applying the Standard at the date of initial application (that is, not to restate comparative information).  The Board decided entities should be encouraged, but not required, to restate comparative information on adoption of AASB 1058.  In addition, the Board redeliberated whether further transitional relief was necessary.

BC143        The Board observed that not-for-profit entities commonly receive assets through donations, taxes and other similar transfers.  The Board acknowledged constituent concerns about the transition requirements for inflows of resources previously accounted for in AASB 1004 but now within the scope of this Standard or 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