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5 Aug. 2020

AASB Staff FAQ on Accounting for Concessionary Loans by NFP entities

Staff FAQs for not-for-profit entities have been extended to accounting for concessionary loans, focussing on the interaction between AASB 1058 Income of Not-for-Profit Entities and AASB 9 Financial Instruments.

The new FAQ (in section 4) provides non-authoritative guidance on how a not-for-profit entity applies AASB 1058 and AASB 9 in accounting for concessionary loans, highlighting that both Standards are applied together. The same accounting outcome should result regardless of whether an entity appears to apply either AASB 9 or AASB 1058 first.
The FAQ includes a flowchart to set out the accounting process and a simple practical example to illustrate the accounting.
This FAQ responds to feedback that AASB 1058 paragraph BC88 could cause confusion in applying the relevant AASB 1058 and AASB 9 requirements.