Contributions by ownersContributions by owners

## Contributions by owners BC168 In developing ED 260, the Board noted the concerns of some constituents with the existing definition of “contributions by owners” (see Appendix A of AASB 1058) and Interpretation 1038 that includes for-profit public sector entities within its scope. The Board observed: (a) the IASB has not defined a similar term employed within the definition of ‘income’ in IFRS Standards; and (b) the IPSASB’s Public Sector Conceptual Framework includes a broader definition of ‘ownership contributions’ than that in Australian Accounting Standards. BC169 Acknowledging constituent concerns about application of the term, the Board decided to invite comment on the defined term “contributions by owners” as part of this project. The Board did not make a specific proposal regarding the definition of “contributions by owners”. Instead, ED 260 illustrated what a replacement Standard for AASB 1004 would look like without that definition and particular related guidance, and posed related questions including whether a definition of ‘contributions by owners’ is still necessary, or appropriate. BC170 In responding to the ED, constituents noted the definition in AASB 1004 can be problematic, identified a need for a definition of contributions by owners and expressed their support for applying the IPSASB definition or using the IPSASB definition as the basis for an Australian definition. Many respondents considered a definition was necessary to minimise diversity in practice. BC171 In addition, the majority of respondents to ED 260 responding on this topic supported the withdrawal of Interpretation 1038. BC172 Having regard to the feedback received, the Board considered whether to: (a) withdraw and not replace the current definition in AASB 1004 and Interpretation 1038; (b) replace the current definition in AASB 1004 with the definition of ownership contributions adopted by the IPSASB, and separately consider whether to retain an amended Interpretation 1038; or (c) address the accounting for contributions by owners as part of a separate project. BC173 The Board was conscious of the need to finalise its proposals on other aspects of its current project in a timely manner. The Board considered that developing any amendment to the definition, including ensuring adequate due process, would delay finalisation of its current project. Accordingly, the Board decided to progress consideration of ‘contributions by owners’ and the related requirements as part of a separate project. Consequently, the Board decided to retain, for the interim: (a) the terms ‘contributions’ and ‘contributions by owners’ as presently defined in Australian Accounting Standards; (b) the requirements specified in AASB 1004 and AASB Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities with respect to contributions by owners and distributions to owners; and (c) the requirements specified in AASB 1004 with respect to contributions by owners and distributions to owners, including those arising in relation to restructures of administrative arrangements. …