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AASB 1004 - Contributions - July 2004

Authoritative Version
AASB 1004 Standards/Accounting & Auditing as amended, taking into account amendments up to AASB 2007-8 - Amendments to Australian Accounting Standards arising from AASB 101 - September 2007
Administered by: Treasury
General Comments: This compilation represents the Standard as at the making date of the last Amending Standard shown in the Table of Standards.
Registered 15 May 2014
Start Date 26 Oct 2007

Compiled Accounting Standard

AASB 1004

 

 

 

 

 

Contributions

 

 

This compiled Standard applies to annual reporting periods beginning on or after 1 January 2009.  Early application is permitted.  It incorporates relevant amendments made up to and including 24 September 2007.

 

Prepared on 24 August 2009 by the staff of the Australian Accounting Standards Board.

 

 

 



Obtaining Copies of Accounting Standards

Compiled versions of Standards, original Standards and amending Standards (see Compilation Details) are available on the AASB website: www.aasb.gov.au.

Printed copies of original Standards and amending Standards are available for purchase by contacting:

 

The Customer Service Officer

Australian Accounting Standards Board

Level 7

600 Bourke Street

Melbourne   Victoria

AUSTRALIA

 

 

 

Postal address:

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Collins Street West   Victoria   8007

AUSTRALIA

Phone:       (03) 9617 7637

Fax:            (03) 9617 7608

E-mail:       publications@aasb.gov.au

Website:    www.aasb.gov.au

 

 

 

Other Enquiries

Phone:       (03) 9617 7600

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E-mail:       standard@aasb.gov.au

 

COPYRIGHT

 

© 2009 Commonwealth of Australia

 

This work is copyright.  Reproduction in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source.  Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Australian Accounting Standards Board.  Requests and enquiries concerning reproduction and rights for commercial purposes should be addressed to The Director of Finance and Administration, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.

 


CONTENTS

COMPILATION DETAILS

COMPARISON WITH IAS 20

Accounting Standard

AASB 1004 Contributions

                                                                                                              Paragraphs

Application                                                                                                      1 – 7

Measurement of Contributions                                                                          8

Recognition of Contributions of Assets                                                   9 – 12

Liabilities Forgiven                                                                                     13 – 14

Disclosures                                                                                                            15

 

Appendix: Defined Terms                                                                         Page 9

 

Australian Accounting Standard AASB 1004 Contributions (as amended) is set out in paragraphs 1 – 15 and the Appendix.  All the paragraphs have equal authority.  Paragraphs in bold type state the main principles.  Terms defined in this Standard are in italics the first time they appear in the Standard.  AASB 1004 is to be read in the context of other Australian Accounting Standards, including AASB 1048 Interpretation and Application of Standards, which identifies the Australian Accounting Interpretations.  In the absence of explicit guidance, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies.

 


compilation details

Accounting Standard AASB 1004 Contributions as amended

This compiled Standard applies to annual reporting periods beginning on or after 1 January 2009.  It takes into account amendments up to and including 24 September 2007 and was prepared on 24 August 2009 by the staff of the Australian Accounting Standards Board (AASB).

This compilation is not a separate Accounting Standard made by the AASB.  Instead, it is a representation of AASB 1004 (July 2004) as amended by other Accounting Standards, which are listed in the Table below.

Table of Standards

Standard

Date made

Application date
(annual reporting periods … on or after …)

Application, saving or transitional provisions

AASB 1004

15 Jul 2004

(beginning) 1 Jan 2005

 

AASB 2007-8

24 Sep 2007

(beginning) 1 Jan 2009

see (a) below

 

(a)       Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2009 provided that AASB 101 Presentation of Financial Statements (September 2007) is also applied to such periods.

Table of Amendments

Paragraph affected

How affected

By … [paragraph]

1

amended

AASB 2007-8 [7, 8]

4

amended

AASB 2007-8 [8]

 


Comparison with IAS 20

AASB 1004 and IAS 20

Not-for-profit entities that comply with the requirements of AASB 1004 may not simultaneously be in compliance with the requirements of IAS 20 Accounting for Government Grants and Disclosure of Government Assistance, which applies to for-profit entities.  This is because the recognition criteria in AASB 1004 are different from those in AASB 120.

AASB 1004 requires contributions received or receivable to be recognised immediately as revenue when:

(a)      the entity obtains control of the contribution or the right to receive the contribution;

(b)      it is probable that the economic benefits comprising the contribution will flow to the entity; and

(c)       the amount of the contribution can be measured reliably.

In contrast, AASB 120 requires government grants to be recognised as income on a systematic basis over the periods necessary to match them with the related costs which they are intended to compensate when there is reasonable assurance that:

(a)      the entity will comply with the conditions attaching to them; and

(b)      the grants will be received.

 


ACCOUNTING STANDARD AASB 1004

The Australian Accounting Standards Board made Accounting Standard AASB 1004 Contributions under section 334 of the Corporations Act 2001 on 15 July 2004.

 

This compiled version of AASB 1004 applies to annual reporting periods beginning on or after 1 January 2009.  It incorporates relevant amendments contained in other AASB Standards made by the AASB up to and including 24 September 2007 (see Compilation Details).

 

 

 

 

aCCOUNTING STANDARD AASB 1004

Contributions

Application

1         This Standard applies to:

(a)      each not-for-profit entity that is required to prepare financial reports in accordance with Part 2M.3 of the Corporations Act and that is a reporting entity;

(b)      general purpose financial statements of each other not-for-profit entity that is a reporting entity; and

(c)       financial statements of not-for-profit entities that are, or are held out to be, general purpose financial statements.

2         This Standard applies to annual reporting periods beginning on or after 1 January 2005.
[Note:  For application dates of paragraphs changed or added by an amending Standard, see Compilation Details.]

3         This Standard shall not be applied to annual reporting periods beginning before 1 January 2005.

4         The requirements specified in this Standard apply to the financial statements where information resulting from their application is material in accordance with AASB 1031 Materiality.

5         When applied or operative, this Standard supersedes:

(a)      AASB 1004 Revenue as notified in the Commonwealth of Australia Gazette No S 283, 17 June 1998; and

(b)      AAS 15 Revenue as issued in June 1998.

6         Both AASB 1004 and AAS 15 remain applicable until superseded by this Standard.

7         Notice of this Standard was published in the Commonwealth of Australia Gazette No S 294, 22 July 2004.

Measurement of Contributions

8         Income shall be measured at the fair value of the contributions received or receivable. 

Recognition of Contributions of Assets

9         Income arising from the contribution of an asset to the entity shall be recognised when, and only when, all the following conditions have been satisfied:

(a)      the entity obtains control of the contribution or the right to receive the contribution;

(b)      it is probable that the economic benefits comprising the contribution will flow to the entity; and

(c)       the amount of the contribution can be measured reliably. 

10       A contribution occurs when an entity receives an asset, including the right to receive cash or other forms of asset without directly giving approximately equal value to the other party or parties to the transfer; that is, when there is a non‑reciprocal transfer.  Contributions would, for example, include donated assets.  Contributions that are income exclude contributions by owners

11       In some cases it may be difficult to determine whether the entity has control of a contribution or the right to receive a contribution.  One such case could be economic benefits expected to be received under a multi-year public policy agreement.  The entity does not obtain control of a contribution under such an agreement until it has met conditions or provided services or facilities that make it eligible to receive a contribution.  On this basis, under multi-year public policy agreements, income would be recognised only in relation to contributions received or receivable under policy agreements.  Another example is where a donor pledges a donation to an entity.  If the pledge is not enforceable against the donor, the entity does not control the contribution.

12       In some cases it may be difficult to determine whether the entity is giving approximately equal value to the other parties to a transfer.  This is particularly the case where, for example, fees are charged by a not-for-profit entity for the potential use of a general pool of facilities.  In circumstances where clubs and professional associations charge fees in return for contributors being able to enjoy the use of facilities, receive publications or practice in a particular vocation for a defined period, an exchange transaction can be presumed and the fees would not be treated as contributions.  The recipient of the fees would have a contractual or constructive obligation to refund some or all fees if it were unable to provide the facilities or services.  In circumstances where the benefits to contributors are only nominal, such as acknowledgment letters, general information about the entity’s activities and satisfaction of contributors’ altruistic goals, the fees are in the nature of contributions.

Liabilities Forgiven

13       The gross amount of a liability forgiven by a credit provider shall be recognised by the borrower as income. 

14       Where equity is substituted for a liability, this is not treated as a forgiveness. 

Disclosures

15       The following information shall be disclosed:

(a)      contributions of assets, including cash and non-monetary assets; and

(b)      the forgiveness of liabilities. 

 


APPENDIX

Defined Terms 

This appendix is an integral part of AASB 1004.

Contributions

Non-reciprocal transfers to the entity.

Contributions by owners

Future economic benefits that have been contributed to the entity by parties external to the entity, other than those which result in liabilities of the entity, that give rise to a financial interest in the net assets of the entity which:

(a)      conveys entitlement both to distributions of future economic benefits by the entity during its life, such distributions being at the discretion of the ownership group or its representatives, and to distributions of any excess of assets over liabilities in the event of the entity being wound up; and/or

(b)      can be sold, transferred or redeemed.

Non-reciprocal transfer

A transfer in which the entity receives assets or services or has liabilities extinguished without directly giving approximately equal value in exchange to the other party or parties to the transfer.