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Commonwealth legislation
What this Standard does
This accounting standard (AASB 1058) sets the rules for how not-for-profit entities (charities, government departments, local councils, universities, etc.) should recognise and measure income they receive when they get assets for significantly less than they're worth — or for free.
Two main situations it covers:
Getting assets cheaply to further your mission — When a not-for-profit receives cash, property, equipment, or other assets for way below market value (or free), and the reason for the discount is to help the organisation achieve its objectives. Examples include:
Volunteer services — When people provide free services that the entity would otherwise have paid for (for some public sector entities, this is required; for others, it's optional).
The basic rule:
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Direct links to the current provisions in AASB 1058 - Income of Not-for-Profit Entities - December 2016.
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View on official registerSourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Special case — grants to build something: If you receive cash specifically to build or buy a major asset for your own use (like a building), you don't recognise income immediately. Instead, you recognise a liability that reduces over time as you build/acquire the asset, with income recognised gradually.
Why it matters: This standard replaced the old "reciprocal/non-reciprocal" distinction that was confusing and inconsistent. It brings not-for-profit income recognition closer to the performance obligation approach in AASB 15 (the revenue standard), making financial statements more transparent and comparable. It also ensures assets are properly valued at fair value, not just the nominal amount paid.
Who it affects: