An exchange or exchange-like transaction is one in which each party receives and sacrifices something of approximate equal value. A non-exchange transaction is one in which one party receives something of value without directly giving value in exchange.

What are the different types of revenue in exchange transactions?

Revenue from exchange transactions is derived from: (a) Sale of goods or provision of services to third parties; (b) Sale of goods or provision of services to other government agencies; and (c) The use by others of entity assets yielding interest, royalties and dividends.

What is exchange revenue?

Groups gain exchange revenues when they receive funds for their goods and services of comparable value. Non-exchange revenues are funds that do not require an exchange of equal value.

How do you identify revenues?

GAAP (generally accepted accounting principle) requires that revenues are recognized according to the revenue recognition principle, a feature of accrual accounting. This means that revenue is recognized on the income statement in the period when realized and earned—not necessarily when cash is received.

How are rainy day funds reported?

Rainy day funds are classified as committed only if they are created by a resolution or ordinance that identifies the specific circumstances under which the resources may be expended. Rainy day funds not meeting these conditions are reported as unassigned fund balance in the General Fund.

What is the relationship between exchange and transaction?

The key difference between transaction and exchange is that a transaction is a contract or agreement between two parties where a good or service is exchanged in return for a monetary value whereas an exchange is a swap of a good or a service between two parties.

What Ipsas 17?

Objective. The objective of IPSAS 17 is to prescribe the accounting treatment for property, plant and equipment so that users of financial statements can discern information about an entity’s investment in its property, plant and equipment and any changes in such investment.

What Ipsas 23?

The objective of IPSAS 23 is to prescribe requirements for the financial reporting of revenue arising from non-exchange transactions, other than non-exchange transactions that give rise to an entity combination. In particular, these include revenue from taxes and transfers (both cash and non-cash transfers).

What’s the difference between Exchange and non exchange revenues?

This content was COPIED from BrainMass.com – View the original, and get the already-completed solution here! The distinction between exchange and non-exchange revenues is not always obvious. You are the independent auditor of various governments.

What are the challenges of non exchange transactions?

• Challenges include: 1. Non-exchange transactions often arise from statutory rather than contractual arrangements, 2. Non-exchange transactions are not executory in nature in that they do not require performance by both parties, and 3. Transactions in the public sector often preclude the identification of a specific customer.

When is a transaction classified as an exchange?

Explains when a transaction should be classified as an exchange transaction and when it should be classified as a non-exchange transaction by solving a problem with 5 different situations. (382 words)

Is the amount of revenue recognized equal to?

The amount of revenue recognized is equal to the consideration the entity is entitled to for satisfying the performance obligation. This new thinking also gives a stimulus to IPSASB to re-evaluate requirements and guidance for the revenue transactions and nonexchange expense transactions.