NON EXCHANGE TRANSACTIONS

Gifts, Donations and Goods In-kind

Services in-kind
Fines and Penalties
Tax Revenue
Shares, Grants and Donations
The entity satisfies a present obligation recognized as a liability which
may be as follows;
-Trust Liabilities
-Deferred Credits
-Unearned Revenue
RECOGNITION AND MEASUREMENT OF
REVENUE FROM NON EXCHANGE
TRANSACTIONS
Cash basis until a reliable model of measurement of this revenue is developed
Asset, corresponding revenue or liability that arises from non-exchange
transaction shall be recognized when COLLECTED or when these are
MEASURABLE and LEGALLY COLLECTIBLE
Tax Revenue- gross amount (shall not be reduced for expenses paid)
Gifts and donations- fair value, when probable that future economic benefits will
flow to the entity
Goods in-kind received without conditions- revenue immediately
Donation in or in-kind- revenue
MEASUREMENT OF REVENUE
Measured at the amount of INCREASE in net assets
recognized by the entity UNLESS it is also required to
recognize a liability.
Where the liability is recognized and subsequently
reduced, the AMOUNT of REDUCTION in the liability
will be recognized as REVENUE
MEASUREMENT OF ASSETS AND LIABILITY AT
INITIAL RECOGNITION
Asset measured at FAIR VALUE as of date of
acquisition
Liability measured at BEST ESTIMATE of the AMOUNT
required to settle the present obligation at the
reporting date
Where TIME VALUE of money is MATERIAL, liability is
measured at PRESENT VALUE of the amount expected
to be required to settle the obligation
TAX REVENUE
Income tax
Value Added Tax
Goods and services tax
Customs duty tax
Death duty
Property tax
TRANSFER OF INTERNAL REVENUE ALLOTMENT

NG NGAs LGUs

Recognizes assets and

Imposes tax Recognize assets
revenue for tax and a
and revenue for
decrease in assets and
transfer
expense for the transfer to
LGUs

To recognize transfer of IRA to LGUs

Financial Assistance to LGUs XX
Cash-Modified Disbursement System (MDS), Regular XX
EXPENSES PAID THROUGH TAX SYSTEM AND
TAX EXPENDITURES
Taxation is at gross amount
It shall not be reduced for expenses paid through tax system
Expenses deducted shall be recognized and shall form part of
the statement of financial performance
Tax expenditures are preferential provisions of the tax law that
provide certain taxpayers with the concessions not available to
others
Tax expenditures are forgone revenue NOT EXPENSES
RECOGNITION OF ASSET THROUGH TRANSFERS
Debt forgiveness and Assumption of Liabilities
-recognizes an increase in NET ASSETS simultaneously recognizes
REVENUE when the related liability no longer meet the recognition criteria at
CARRYING AMOUNT.
Fines
-recognize REVENUE when the RECEIVABLE meets the definition of an
ASSET and satisfies for the recognition of an asset, ASSETS are measured at BEST
ESTIMATE
Bequests
-measured at FAIR VALUE when it is PROBABLE that future economic
benefits or service potential WILL FLOW to the entity and it can be MEASURED
RELIABLY
RECOGNITION AND MEASUREMENT OF GIFTS,
DONATIONS AND GOODS IN-KIND
Gifts and donations
-assets and revenue recognized when it is probable that future economic
benefits will flow and the FAIR VALUE can be measured reliably

Goods in-kind
-recognized as assets when the goods are received or there is a binding
arrangement to receive the goods. If NO CONDITIONS are attached then revenue is
recognized IMMEDIATELY. If CONDITIONS are attached a liability is recognized which
is REDUCED and revenue recognized as the conditions are SATISFIED

*Both are initially recognized at FAIR VALUE as at the DATE OF ACQUISITION

RECOGNITION AND MEASUREMENT OF
SERVICES IN-KIND
Disclosure of nature and type of services in kind received during
the reporting period ONLY due to uncertainties surrounding the
services in-kind
For some public sector, services provided by volunteers are not
material in amount but may be material in nature.
RECOGNITION AND DISCLOSURE OF PLEDGES
If the pledged item is subsequently transferred to the
recipient entity, it is recognized as a gift or donation
May warrant disclosure as contingent assets
ADVANCE RECEIPT OF REVENUE
Recognized as an ASSET when they meet the definition and
SATISFY the criteria for recognition as an asset
Recognized as liability until the event that makes the transfer
arrangement binding occurs, and ALL other conditions under the
agreement is FULFILLED.
When liability is discharged, REVENUE is recognized.
RECOGNITION AND MEASUREMENT OF
CONCESSIONARY LOANS
Any DIFFERENCE between the TRANSACTION PRICE (LOAN
PROCEEDS) and the FAIR VALUE of the loan on INITIAL
RECOGNITION is a non exchange transaction then recognized as
REVENUE
EXCEPT if a present obligation exists then LIABILITY is REDUCED
and an EQUAL amount of REVENUE is recognized
GRANT WITH CONDITION
If conditions are attached to a grant, a liability is
recognized which is reduced and revenue recognized
as the conditions are satisfied.