Document ID: chunk:federal_register_of_legislation:F2023C00188:reg:7:p65
Version: federal_register_of_legislation:F2023C00188
Segment Type: reg
Provision Reference: reg 7 (pt 65/91)
Character Range: 185381–188330

with a customer and a donation component was not intuitive.  The Board discussed feedback that the approach proposed in ED 260 overcomplicates the accounting, implies that the not-for-profit entity needs to 'stand in the shoes' of the transferor, and prioritises non-refundability as a distinguishing factor.

BC79            In its redeliberations, having regard to the feedback received, the Board confirmed its decision that the underlying principle that applies is for each component of a transaction to be accounted for separately, where material.  However, acknowledging the constituent concerns described above, the Board decided not to require income to be recognised in accordance with this Standard in every such situation.

BC80            Instead, the Board decided to develop a rebuttable presumption (set out in Appendix F to AASB 15) that the transaction price in a contract with a customer is treated as wholly related to the transfer of promised goods or services.  The Board decided that this presumption should be rebutted where the transaction price is partially refundable in the event the entity does not deliver the promised goods or services.  That is, for transactions including a contract with a customer, only where these criteria are met may an entity have to possibly recognise an amount as income in accordance with paragraph 10 of this Standard.  The Board considered whether the rebuttable presumption needed to also refer to separate identifiability of the element that is not related to the transfer of promised goods or services.  The Board decided that this was not necessary, as this element – and any associated amount ascribed to it – represents the residual remaining after allocating the transaction price to the performance obligations in that contract.  The Board's considerations in forming this decision are set out in its Basis for Conclusions to AASB 2016-8.

BC81            The rebuttable presumption is set out in Appendix F to AASB 15 (inserted via AASB 2016-8).  However, the Board considered it important to highlight to users, as part of this Standard, that the requirements with respect to the accounting for contracts with customers where the transaction price includes an amount that would otherwise be separately recognised and accounted for as income immediately in accordance with this Standard is specified by AASB 15.

Leases with significantly below-market terms and conditions

BC82            In ED 260 the Board proposed a consequential amendment to AASB 117 Leases that would require entities to measure the lease asset and lease liability arising from a finance lease at the fair value of the leased asset.  Constituents questioned the application of the requirements, observing in particular:

(a)                    applying the amendment would result in equal measurement of the asset and the liability associated with the finance lease.  A residual amount would never arise and