Document ID: chunk:federal_register_of_legislation:F2021C00884:reg:44:p8
Version: federal_register_of_legislation:F2021C00884
Segment Type: reg
Provision Reference: reg 44 (pt 8/15)
Character Range: 43241–46506

of assets are scoped out by the definition of a business in AASB 3.

Compliance with parliamentary appropriations and other externally-imposed requirements by government departments
BC30            The Board noted that issues relating to compliance with parliamentary appropriations and other externally-imposed requirements are important for government accountability.  Accordingly, the Board concluded that the requirements in paragraphs 12.6 and 12.6.2-12.6.4 of AAS 29 for disclosure of compliance with parliamentary appropriations and other externally imposed requirements should be retained.
BC31            The Board concluded that the requirements for the disclosure by government departments of compliance with parliamentary appropriations and other externally-imposed requirements are sufficiently related to the topic of contributions to be incorporated into this Standard.
BC32            Consistent with the short-term nature of the project, the requirements are to be limited to government departments rather than applying them more broadly to not-for-profit public sector entities.  In due course, the Board will consider extending the application of the requirements.
BC33            The Board concluded that it is appropriate to not retain paragraph 12.6.1 of AAS 29, which explains the meaning of parliamentary appropriations, as it is no longer necessary.

Basis for Conclusions on AASB 1058
This Basis for Conclusions accompanies, but is not part of, AASB 1004. The Basis for Conclusions was originally published with AASB 1058 Income of Not-for-Profit Entities.

Background
BC1 This Basis for Conclusions summarises the Australian Accounting Standards Board's considerations in reaching the conclusions in AASB 1058.  It sets out the reasons why the AASB developed the Standard, the approach taken to developing the Standard and the key decisions made.  In making decisions, individual Board members gave greater weight to some factors than to others.

     The need for change
BC2 Prior to the issue of this Standard and AASB 15 Revenue from Contracts with Customers, the recognition and measurement requirements for  transactions giving rise to income depended on whether the transaction was reciprocal or non-reciprocal in nature.  The accounting for income arising from reciprocal transactions was predominantly addressed in AASB 118 Revenue and AASB 111 Construction Contracts.  The accounting for income arising from non-reciprocal transactions was addressed in AASB 1004 Contributions.
BC3 The Board observed determining whether a transaction was reciprocal or non-reciprocal in practice was not always straightforward.  Entities found it challenging to determine whether approximately equal value had been provided in exchange to the other party or parties to the transfer, and contended that in many instances the immediate recognition of income in a non-reciprocal transaction did not faithfully represent the underlying financial performance of the entity.  Diverse interpretations existed, with some entities recognising transactions with return obligations and specified performance outcomes as reciprocal transactions and some not.
BC4 Constituents were particularly concerned about the income recognition requirements as applied