A common criticism of the accounting requirements for not-for-profit entities (NFPs) is the apparent ‘mismatch’ created by AASB 1004 Contributions between the recognition of income at the time of receipt, and the associated expenses that are incurred and reported in later reporting periods.
The Australian Accounting Standards Board (AASB) has sought to address this problem by introducing AASB 15 Revenue from Contracts with Customers and AASB 1058 Income for Not-for-Profit Entities.
The standards apply to all private sector not-for-profit entities and most public sector entities, becoming mandatorily effective for years beginning on or after 1 January 2019. Early adoption is permitted, provided both standards are adopted at the same time.
For further clarity or guidance around these changes and what they mean for you, we encourage you to contact your local Crowe Horwath adviser for more information.