Document ID: chunk:federal_register_of_legislation:F2023C00402:front:0:p85
Version: federal_register_of_legislation:F2023C00402
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Character Range: 222532–225616

available at least annually to donors and authorised third parties in accordance with its policy may create a valid expectation that the research findings will be made available. In this case, the implicit promises to make available de-identified research findings periodically would be treated as part of the grant terms. [The grant agreement could instead refer explicitly to the making available of research findings, so that reference to a policy of the institute would not be necessary.]

    Example 5—Research activities—No contract with a customer

    Example 5A – Enforceable agreement, performance obligations not sufficiently specific

    University G receives a cash grant from a donor, Medical Research Trust Z, of $2 million to undertake research that aims to identify and validate biomarkers to distinguish malignant cancers from benign tumours.

    The terms of the grant are:

                    a period of two years;

                    the return of funds that are either unspent or not spent in accordance with the agreement;

                    semi-annual budget reports that detail how the funds have been spent to date; and

                    the research results are publicised, when appropriate, in conference presentations and/or published in scholarly journals.

    University G notes that the arrangement is enforceable as the grant is refundable if the research is not undertaken. However, University G concludes its arrangement with donor Z is not a contract with a customer as defined in AASB 15. This is on the basis that:

                    publicising the research results when appropriate is not sufficiently specific to enable University A to identify when it satisfies its obligations because there is no requirement to produce a specified number of publications or deliver a specified number of presentations; and

                    the budget reports merely provide the grantor an indication of the University's spending of funds and do not represent a transfer of a benefit to the grantor.

    Accordingly, the university concludes that the arrangement is not within the scope of AASB 15. Given that the university acquired cash (the grant funds) for consideration that is significantly less than fair value (there are no performance obligations to recognise) principally to enable it to further its objectives (research), University G concludes that AASB 1058 Income of Not-for-Profit Entities is applicable.

    Accounting treatment

    University G recognises a financial asset of $2 million for the cash grant received and recognises any related amounts arising under other Australian Accounting Standards in accordance with AASB 1058. Any excess of the financial asset over the related amounts would be recognised as income.

    Example 5B – Enforceable agreement, performance obligations not sufficiently specific, individual researcher controls grant funds

    In this example, the facts of Example 5A apply, except that:

                    University G receives the grant funds to administer on behalf of a