FINANCIALS 2018
The core principle of AASB 15 is that an entity should
recognise revenue to depict the transfer of promised
goods or services to customers in an amount that
reflects the consideration to which the entity expects
to be entitled in exchange for those goods or
services. Specifically, the Standard introduces a 5-step
approach to revenue recognition:
• Step 1: Identify the contract(s) with a customer
• Step 2: Identify the performance obligations in
the contract
• Step 3: Determine the transaction price
• Step 4: Allocate the transaction price to the
performance obligations in the contract
• Step 5: Recognise revenue when (or as) the
entity satisfies a performance obligation
2.2 New and revised Australian Accounting
Standards and Interpretations on issue
but not yet effective (continued)
Consequential amendments to other Standards
and Interpretations:
The issuance of AASB 1058 also results in
consequential amendments to other Standards
and Interpretations, as set out below:
• AASB 15 Revenue from Contracts with Customers
• AASB 16 Leases
• AASB 101 Presentation of Financial Statements
• AASB 116 Property, Plant and Equipment
• AASB 117 Leases
• AASB 138 Intangible Assets
• AASB 1004 Contributions
• AASB 1057 Application of Australian Accounting
Standards
KU
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Under AASB 15, an entity recognises revenue when
(or as) a performance obligation is satisfied, i.e.
when ‘control’ of the goods or services underlying
the particular performance obligation is transferred
to the customer.
Among the amendments listed above, the key
amendments to note are the:
• new lessee accounting requirements for leases at
significantly below-market terms and conditions
(commonly known as ‘peppercorn leases’)
principally to enable the lessee to further its
objectives (as amended in AASB 16 and AASB 117).
This requires the lessee to recognise the leased
asset / right-of-use asset at fair value per AASB 13,
the lease liability per AASB 117 / AASB 16 and the
residual as income at the inception of the lease;
• requirement to measure inventories (e.g. donated
inventories) at current replacement cost where the
consideration for those inventories is significantly
less than fair value principally to enable the entity to
further its objectives (as amended in AASB 102);
• requirement to measure the cost of the asset (e.g.
property, plant and equipment, intangible asset
or investment property) at fair value per AASB 13
where the consideration for the asset is significantly
less than fair value principally to enable the entity
to further its objectives (as amended in AASB 116,
AASB 138 and AASB 140); and
• removal of all income recognition requirements
for private sector NFP entities and majority of
income recognition requirements for public
sector NFP entities in AASB 1004.
In May 2016, the AASB issued AASB 2016-3
Amendments to Australian Accounting Standards
– Clarifications to AASB 15 in relation to the
identification of performance obligations, principal
versus agent considerations, as well as licensing
application guidance.
In December 2016, the AASB issued the
following amending Standards that applies
to not-for-profit entities:
• AASB 2016-7 Amendments to Australian
Accounting Standards – Deferral of AASB 15 for
Not-for-Profit Entities which deferred the application
date for not-for-profit entities to 1 January 2019
• AASB 2016-8 Amendments to Australian
Accounting Standards – Australian Implementation
Guidance for Not- for-Profit Entities which introduced
not-for-profit-specific implementation guidance on
‘enforceability’ of a contract (Step 1), ‘sufficiently
specific’ performance obligations (Step 2) and
separate recognition of ‘donation’ element (Step 4).
3. Summary of Accounting Policies
Statement of compliance
The financial report is a general purpose financial report
which has been prepared in accordance with Division
60 of the Australian Charities and Not-for-profits
Commission Act 2012, and Australian Accounting
Standards – Reduced Disclosure Requirements and
complies with other requirements of the law.
c) AASB 15 Revenue from Contracts with Customers
is effective for annual periods beginning on or after
1 January 2019. This Standard is expected to be
initially adopted for the financial period ending 31
December 2019.
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