AASB 1058 and AASB 15 deferred

AASB 1058 and AASB 15 deferred for research grants

At its November 2019 Board meeting, the Australian Accounting Standards Board (AASB) decided to defer the mandatory application of AASB 1058 Income of Not-for-Profit Entities and AASB 15 Revenue from Contracts with Customers, but only for research grants. These two standards will therefore apply to NFPs for 31 December 2019 year-ends for all types of grants received, except for research grants.

NFPs receiving research grants will have an option to defer applying AASB 1058 and AASB 15 to research grants until 30 June 2020 (i.e. annual periods beginning on or after 1 July 2019), but early application is permitted. AASB 1058 and AASB 15 will, however, apply to other income for 31 December 2019 reporting periods.

The AASB also noted in its November 2019 Action Alert that it would proceed with proposed amendments to illustrative Examples 4A and 4B which accompany AASB 15. It should be noted that these amendments do not change the conclusions reached as to whether the research grant contracts contain sufficiently specific performance obligations. It was also proposed to add Example 4D (previously Scenario 2A in the AASB Staff FAQ 6) as an accompanying illustrative example in AASB 15.

Next steps

The AASB expects to issue an amending standard to effect these changes prior to the end of December 2019.