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21 Dec. 2017

Exposure Draft: Australian Implementation Guidance for NFP Public Sector Licensors

Revenue from licences issued by the public sector makes up a significant portion of public sector revenue, but it appears the accounting treatment for these licences under AASB 15 Revenue from Contracts with Customers is unclear. 

Developed to help reduce diversity in accounting for revenue from licences issued by public sector entities (such as gambling, driving, fishing licences), the AASB has today released ED 283 Amendments to Australian Accounting Standards – Australian Implementation Guidance for Not-for-Profit Public Sector Licensors

ED 283 provides amendments, guidance and illustrative examples based on AASB 15 that aim to assist public sector licensors to:

a) distinguish licences from taxes

b) determine the nature of licences issued (eg licences that are leases or contain a lease, licences that are not distinct from other goods or services, intellectual property (IP) licences versus non-IP licences) and identify the relevant accounting requirements

c) understand performance obligations relevant to public sector licence arrangements.

The ED also suggests practical expedients for short-term or low value licences.

Please share your views on these proposals via the AASB website, LinkedIn or email.