The AASB have issued three new accounting, as follows:
- AASB 1058 Income of Not-for-Profit Entities;
- AASB 2016-7 Amendments to Australian Accounting Standards â€“ Deferral of AASB 15 for Not for-Profit Entities; and
- AASB 2016-8 Amendments to Australian Accounting Standards â€“ Australian Implementation Guidance for Not-for-Profit Entities.
As a result of the new standards, financial reporting for not-for-profit entities will now more closely reflect economic reality. Revenue from grants and donations will be recognised when any associated performance obligation to provide goods or services is satisfied, and not immediately upon receipt.
More assets will also be recorded on the balance sheet under the new requirements, including leases with significantly below-market terms and conditions. Currently, only assets acquired by not-for-profit entities at nil or nominal consideration must be recognised at fair value. The new requirements broaden this to assets where entities pay significantly less than fair value, principally to let them further their objectives.
Significant transitional relief has been provided, as well as a one-year extension of the effective date of AASB 15 Revenue from Contracts with Customers for the not-for-profit sector. The requirements will be effective from 1 January 2019, with earlier adoption permitted.
To read more, visit the AASB website here.