3To meet the objective in paragraph 1(a), an entity shall initially recognise:

3 To meet the objective in paragraph 1(a), an entity shall initially recognise: (a) an asset in accordance with the applicable Australian Accounting Standard; (b) any related contributions by owners, contract liabilities, financial liabilities, lease liabilities and other liabilities and revenue, measured in accordance with the applicable Australian Accounting Standard; (c) any liabilities for obligations arising from transfers to enable the entity to acquire or construct non-financial assets to be controlled by the entity; and (d) related income, representing the residual amount of resources received. 4 To meet the objective in paragraph 1(b), certain types of public sector entities shall recognise assets or expenses for volunteer services received if the fair value of those services can be measured reliably and the entity would have purchased those services if they had not been donated. Any not-for-profit entity may elect to recognise volunteer services received if their fair value can be measured reliably irrespective of whether that entity would have purchased those services if not donated. 5 AASB 15 Revenue from Contracts with Customers defines income as increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions by equity participants (that is, owners). This Standard addresses income arising from the acquisition of assets for consideration that is significantly less than the fair value of the asset when that difference is principally to enable the not-for-profit entity to further its objectives. This Standard applies to those differences that result in increases in equity, other than those relating to contributions by owners or those accounted for under another Standard (eg AASB 15). Other Australian Accounting Standards (eg AASB 1004 Contributions) address income arising from decreases of liabilities and the accounting for contributions by owners. 6 An entity shall apply the requirements of this Standard to each transaction based on the substance of the transaction, rather than its legal form or the description given to it (eg grants or donations), so as to provide a faithful representation of the economic substance of the transaction. ## Scope (paragraphs B2—B11) Scope (paragraphs B2—B11) ## Scope (paragraphs B2–B11) 7 An entity shall apply this Standard to transactions where the consideration to acquire an asset is significantly less than fair value principally to enable the entity to further its objectives, and the receipt of volunteer services, except for: (a) share-based payment transactions within the scope of AASB 2 Share-based Payment; (b) business combinations within the scope of AASB 3 Business Combinations; (c) contracts within the scope of AASB 17 Insurance Contracts; (d) licences outside the scope of AASB 15; (e) income taxes within the scope of AASB 112 Income Taxes; and (f) restructures of administrative arrangements within the scope of AASB 1004. Aus7.1 Further to paragraph 7, public sector entities shall not apply this Standard to insurance contracts within the scope of AASB 4 Insurance Contracts or AASB 1023 General Insurance Contracts. ## Recognition and measurement Recognition and measurement # Accounting Standard AASB 1058 The Australian Accounting Standards Board made Accounting Standard AASB 1058 Income of Not-for-Profit Entities under section 334 of the Corporations Act 2001 on 9 December 2016. This compiled version of AASB 1058 applies to annual periods beginning on or after 1 January 2023 but before 1 July 2026. It incorporates relevant amendments contained in other AASB Standards made by the AASB up to and including 15 December 2022 (see Compilation Details). Accounting Standard AASB 1058 Income of Not-for-Profit Entities 1 This Standard establishes principles for not-for-profit entities that apply to: (a) transactions where the consideration to acquire an asset is significantly less than fair value principally to enable a not-for-profit entity to further its objectives; and (b) the receipt of volunteer services. 2 If the consideration provided to acquire an asset, including cash, is significantly less than the fair value of that asset, or if no consideration was provided, and the difference is principally to enable the entity to further its objectives, such a transaction is within the scope of this Standard. For example, an entity that receives a cash grant to be used to further its objectives might not have provided any consideration in exchange for that cash. As another example, governments are entitled to non-contractual receivables arising from statutory requirements such as taxes and rates without providing consideration to the other party – those receivables provide income to the government to further its objectives. This Standard addresses the accounting for the income arising from such transactions. ### Meeting the objective 3 To meet the objective in paragraph 1(a), an entity shall initially recognise: (a) an asset in accordance with the applicable Australian Accounting Standard; (b) any related contributions by owners, contract liabilities, financial liabilities, lease liabilities and other liabilities and revenue, measured in accordance with the applicable Australian Accounting Standard; (c) any liabilities for obligations arising from transfers to enable the entity to acquire or construct non-financial assets to be controlled by the entity; and (d) related income, representing the residual amount of resources received. 4 To meet the objective in paragraph 1(b), certain types of public sector entities shall recognise assets or expenses for volunteer services received if the fair value of those services can be measured reliably and the entity would have purchased those services if they had not been donated. Any not-for-profit entity may elect to recognise volunteer services received if their fair value can be measured reliably irrespective of whether that entity would have purchased those services if not donated. 5 AASB 15 Revenue from Contracts with Customers defines income as increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions by equity participants (that is, owners). This Standard addresses income arising from the acquisition of assets for consideration that is significantly less than the fair value of the asset when that difference is principally to enable the not-for-profit entity to further its objectives. This Standard applies to those differences that result in increases in equity, other than those relating to contributions by owners or those accounted for under another Standard (eg AASB 15). Other Australian Accounting Standards (eg AASB 1004 Contributions) address income arising from decreases of liabilities and the accounting for contributions by owners. 6 An entity shall apply the requirements of this Standard to each transaction based on the substance of the transaction, rather than its legal form or the description given to it (eg grants or donations), so as to provide a faithful representation of the economic substance of the transaction. ## Scope (paragraphs B2–B11) 7 An entity shall apply this Standard to transactions where the consideration to acquire an asset is significantly less than fair value principally to enable the entity to further its objectives, and the receipt of volunteer services, except for: (a) share-based payment transactions within the scope of AASB 2 Share-based Payment; (b) business combinations within the scope of AASB 3 Business Combinations; (c) contracts within the scope of AASB 17 Insurance Contracts; (d) licences outside the scope of AASB 15; (e) income taxes within the scope of AASB 112 Income Taxes; and (f) restructures of administrative arrangements within the scope of AASB 1004. Aus7.1 Further to paragraph 7, public sector entities shall not apply this Standard to insurance contracts within the scope of AASB 4 Insurance Contracts or AASB 1023 General Insurance Contracts. ### Recognition and measurement of an asset 8 Except as set out in paragraphs 18–22, an entity shall apply the requirements of other Australian Accounting Standards (as relevant) to an asset arising from a transaction within the scope of this Standard. Examples include: (a) AASB 9 Financial Instruments (eg cash received); (b) AASB 16 Leases; (c) AASB 116 Property, Plant and Equipment; and (d) AASB 138 Intangible Assets. ### Recognition and measurement of income and related amounts (paragraphs B12–B31) 9 On initial recognition of an asset, an entity shall recognise any related contributions by owners, increases in liabilities, decreases in assets, and revenue (‘related amounts’) in accordance with other Australian Accounting Standards. For example, related amounts may take the form of: (b) revenue or a contract liability arising from a contract with a customer, in accordance with AASB 15; (c) a lease liability in accordance with AASB 16; (d) a financial instrument, in accordance with AASB 9; or (e) a provision, in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets. 10 Except as set out in paragraphs 15–17, an entity shall recognise income immediately in profit or loss for the excess of the initial carrying amount of an asset over the related amounts recognised in accordance with paragraph 9. 11 Appendix F Australian Implementation Guidance for Not-for-Profit Entities of AASB 15 provides guidance on the identification of a contract with a customer in a not-for-profit entity context. The Appendix also clarifies the measurement of revenue and contract liabilities where the transaction price includes an amount that would otherwise be separately recognised and accounted for as income immediately in accordance with this Standard. 12 For the purposes of this Standard, income is determined as the difference between the consideration for an asset and the asset’s fair value, after recognising any other related amounts. An entity applies judgement in determining the extent to which the acquisition of an asset gives rise to income as specified by this Standard or to revenue, a liability or a contribution by owners recognised in accordance with another Australian Accounting Standard. 13 An entity might acquire an asset and also recognise related amounts that in total exceed the initial measurement of the asset. In such cases, the entity shall reassess whether it has appropriately identified and measured all the related amounts. If an excess remains after restating any related amounts, the entity shall recognise an expense immediately in profit or loss for the excess of the related amounts over the carrying amount of the asset acquired. An entity does not adjust the excess against the recognised related amounts. 14 An entity shall subsequently apply the requirements of other Australian Accounting Standards applicable to the related amounts referred to in paragraph 9. #### Transfers to enable an entity to acquire or construct a recognisable non-financial asset to be controlled by the entity 15 A transfer of a financial asset to enable an entity to acquire or construct a recognisable non-financial asset that is to be controlled by the entity is one that: (a) requires the entity to use that financial asset to acquire or construct a recognisable non-financial asset to identified specifications; (b) does not require the entity to transfer the non-financial asset to the transferor or other parties; and (c) occurs under an enforceable agreement. 16 An entity shall recognise a liability for the excess of the initial carrying amount of a financial asset received in a transfer to enable the entity to acquire or construct a recognisable non-financial asset that is to be controlled by the entity over any related amounts recognised in accordance with paragraph 9. The entity shall recognise income in profit or loss when (or as) the entity satisfies its obligations under the transfer. 17 In such circumstances, the transferor has in substance transferred a recognisable non-financial asset to the entity. The entity recognises the financial asset received in accordance with AASB 9 and subsequently recognises the acquired or constructed non-financial asset in accordance with the applicable Australian Accounting Standard (eg AASB 116 for property, plant and equipment). This Standard requires the entity to initially recognise a liability representing the entity’s obligation to acquire or construct the non-financial asset and, if applicable, other performance obligations under AASB 15, which involve the transfer of goods or services to other parties. The liability in relation to acquiring or constructing the non-financial asset is initially measured at the carrying amount of the financial asset received from the transferor that is not attributable to related amounts for performance obligations under AASB 15, contributions by owners, etc. The liability is recognised until such time when (or as) the entity satisfies its obligations under the transfer. 18 Local governments, government departments, general government sectors (GGSs) and whole of governments shall recognise an inflow of resources in the form of volunteer services as an asset (or an expense, when the definition of an asset is not met) if: (a) the fair value of those services can be measured reliably; and (b) the services would have been purchased if they had not been donated. 19 Any not-for-profit entity (including those listed in the preceding paragraph) may, as an accounting policy choice, elect to recognise volunteer services, or a class of volunteer services, if the fair value of those services can be measured reliably, whether or not the services would have been purchased if they had not been donated. 20 Some volunteer services, such as professional services, might have readily observable market prices. In such circumstances, obtaining a reliable measure of fair value would be relatively straightforward. An entity is not required to perform an exhaustive search for volunteer services that might meet the recognition criteria in this Standard. Volunteer services that would have been purchased if they were not donated should be readily identifiable from the entity’s operational requirements.