Document ID: chunk:federal_register_of_legislation:F2024L00075:reg:38:p34
Version: federal_register_of_legislation:F2024L00075
Segment Type: reg
Provision Reference: reg 38 (pt 34/76)
Character Range: 128132–131358

loss when they occur.
BC80            The AASB considered the merits of retaining this approach and noted that defined contribution members may choose between superannuation entities based on investment returns.  In addition, some employer-sponsors of entities with defined benefit members would rely on investment returns to minimise the likelihood of being required to make additional future contributions.
BC81            The AASB also noted that some Australian Accounting Standards require remeasurements of some types of assets to be debited or credited to comprehensive income.  However, the AASB concluded all remeasurements, other than tax items, that are credited or charged directly to member benefits should be presented in the income statement when they occur to facilitate a clear presentation of a superannuation entity's financial performance.  The AASB also noted this treatment is generally consistent with prudential reporting and to require otherwise may increase reporting costs.

Presentation of contributions, rollovers, transfers and benefit payments
BC82            Under AAS 25, contributions, rollovers and other inwards transfers are treated as revenues, and benefits to members are treated as expenses.
BC83            The AASB decided this treatment should not be retained because:
(a)                   for defined contribution members, member contributions, transfers and rollovers and employer contributions fully vest in members and are payable to, or on behalf of, members upon demand (if they rollover their benefits to another superannuation entity or meet a condition of release) and therefore give rise to liabilities; and
(b)                   employer contributions on behalf of defined benefit members assist in funding the obligations to such members.
BC84            Accordingly, the AASB concluded these flows increase the liabilities of superannuation entities and benefit payments reduce those liabilities, and they are not in the nature of revenues and expenses.

Net benefits allocated to defined contribution members' accounts
BC85            Under AAS 25, the difference between a defined contribution superannuation entity's revenues and expenses is presented in the operating statement as benefits accrued for members and their beneficiaries during the period.
BC86            The AASB noted this could be interpreted by some users to mean all revenues and expenses attributable to defined contribution members are allocated to their accounts and vest with them.  However, this might not be the case where, for example, a trustee creates a reserve of unallocated assets.  The AASB also noted:
(a)                   other Australian Accounting Standards that permit or require liabilities to be remeasured generally require recognition of remeasurement changes in profit or loss when they occur;[6] and
(b)                   it had concluded that most of a superannuation entity's assets and other liabilities should be measured at fair value, with remeasurement changes recognised in the income statement when they occur.
BC87            The AASB concluded that a superannuation entity should present the net benefits allocated to defined contribution members' accounts for