Document ID: chunk:federal_register_of_legislation:F2023C00402:reg:97:p15
Version: federal_register_of_legislation:F2023C00402
Segment Type: reg
Provision Reference: reg 97 (pt 15/56)
Character Range: 300435–303475

not be the customer identified in the contract for the contract to be within the scope of AASB 15.

     BC49            Consequently, the Board retained in the final Standard the principle that a performance obligation only exists if it is sufficiently specific to enable the entity to determine when it has satisfied that obligation.  In response to the feedback on ED 260 the Board finalised its proposals with the additional guidance noted above.

Allocating the transaction price to performance obligations
     BC50            A customer may enter into a contract with a not-for-profit entity with a dual purpose of obtaining goods or services and helping the not-for-profit entity achieve its objectives.  The  Board considered that, to represent faithfully the substantially different components of such a contract of a not-for-profit entity, in principle it is important that the amount of consideration that is not attributable to the goods or services promised by the entity to its customer should be:

          (a)                    measured and disclosed separately from the revenue arising from transferring a good or service to the customer; and

          (b)                   recognised when the entity recognises the transferred asset(s) – which might be a different time from when the entity transfers the promised good or service to the customer.

     BC51            Accordingly, the Board proposed in ED 260 to require a separately identifiable "donation" component in a contract with a customer to be accounted for as income immediately.  ED 260 proposed that such a component should be identified in a two-step model:

          (a)                    determine whether the customer intended to make a donation to the entity; and

          (b)                   separately identify the component from the goods or services promised in the contract.

     BC52            Feedback on the ED 260 model indicated significant concern in relation to implementing the two-step process.  The primary concern raised was that assessing the customer's intent when making the donation would be highly subjective and, for many transactions, such an assessment could not be made due to a lack of evidence.  Despite these concerns, the majority of respondents agreed that any "donation" component included in a contract with a customer should be separated from the contract and accounted for in accordance with AASB 1058.

     BC53            To address constituent concerns the Board decided to replace the two-step model with a rebuttable presumption.  The presumption is that the total transaction price in a contract with a customer is related to the transfer of the promised goods or services.  That is, the entire transaction price is presumed to compensate the entity for the goods or services.  Where the transaction price is only partially related to the transfer of the promised goods or services the presumption is rebutted and the transaction price split into its component parts.

     BC54            The Board