“The income recognition model in AASB 1004 Contributions is flawed and needs replacing” was the message from constituents to the AASB.
To address this concern the AASB issued for comment ED 260 Income of Not-for-Profit Entities in April 2015. The ED’s most important proposal is the removal of the “reciprocal v non-reciprocal” income recognition requirements of AASB 1004. It proposes they be replaced with income recognition requirements that are dependent on the answer to a new question – does the transferred asset give rise to a performance obligation under a contract with a customer?
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