Click to edit Master text styles
Second level
Third level
Fourth level
Fifth level
20478HOU
In a nonexchange transaction, a government either gives or receives value without directly receiving equal value in exchange.
To illustrate what I mean by directly, let’s look at a simple example.  In a classic exchange transaction, such as buying groceries, I give the grocery store cash and they give me groceries. 
However, when I give the government my income taxes, exactly what do I get in return?
The standard outlines 4 classes of nonexchange transactions.
The standard outlines 4 classes of nonexchange transactions.
Both parties may be governments or one party may be a nongovernmental entity, including and individual.
Often the provider establishes purpose restrictions and eligibility requirements.
Principal characteristics of voluntary nonexchange transactions are:
1)  they are not imposed on the provider or the recipient, and
2)  fulfillment of eligibility requirements is essential for a transaction to occur
Required characteristics of recipients - recipient has the characteristics specified by the provider
Time requirements - usually specified in enabling legislation, such as specification of the grant period
Reimbursements - provider offers resources on a reimbursement basis and the recipient has incurred allowable costs under the program
Contingencies - Specific action required by the provider has occurred, such as paying the required match on a grant program or raising a certain amount of money to be matched by the provider.
Required characteristics of recipients - recipient has the characteristics specified by the provider
Time requirements - usually specified in enabling legislation, such as specification of the grant period
Reimbursements - provider offers resources on a reimbursement basis and the recipient has incurred allowable costs under the program
Contingencies - Specific action required by the provider has occurred, such as paying the required match on a grant program or raising a certain amount of money to be matched by the provider.
Required characteristics of recipients - recipient has the characteristics specified by the provider
Time requirements - usually specified in enabling legislation, such as specification of the grant period
Reimbursements - provider offers resources on a reimbursement basis and the recipient has incurred allowable costs under the program
Contingencies - Specific action required by the provider has occurred, such as paying the required match on a grant program or raising a certain amount of money to be matched by the provider.
Required characteristics of recipients - recipient has the characteristics specified by the provider
Time requirements - usually specified in enabling legislation, such as specification of the grant period
Reimbursements - provider offers resources on a reimbursement basis and the recipient has incurred allowable costs under the program
Contingencies - Specific action required by the provider has occurred, such as paying the required match on a grant program or raising a certain amount of money to be matched by the provider.
Required characteristics of recipients - recipient has the characteristics specified by the provider
Time requirements - usually specified in enabling legislation, such as specification of the grant period
Reimbursements - provider offers resources on a reimbursement basis and the recipient has incurred allowable costs under the program
Contingencies - Specific action required by the provider has occurred, such as paying the required match on a grant program or raising a certain amount of money to be matched by the provider.
Required characteristics of recipients - recipient has the characteristics specified by the provider
Time requirements - usually specified in enabling legislation, such as specification of the grant period
Reimbursements - provider offers resources on a reimbursement basis and the recipient has incurred allowable costs under the program
Contingencies - Specific action required by the provider has occurred, such as paying the required match on a grant program or raising a certain amount of money to be matched by the provider.
Required characteristics of recipients - recipient has the characteristics specified by the provider
Time requirements - usually specified in enabling legislation, such as specification of the grant period
Reimbursements - provider offers resources on a reimbursement basis and the recipient has incurred allowable costs under the program
Contingencies - Specific action required by the provider has occurred, such as paying the required match on a grant program or raising a certain amount of money to be matched by the provider.
This is a derived tax revenue. 
The city should recognize assets and revenues for each night a guest stays in a hotel room in the City. 
The requirement to use tax proceeds for the convention center is a purpose restriction, which requires net assets be reported as restricted until they are expended for construction.
This illustrates an imposed nonexchange transaction.
The City should recognize a receivable on January 1, 20x1 which is the date an enforceable legal claim arises.
Revenues should be recognized for the period May 1, 20x1 to April 30, 20x2 because it is the levy period for which the tax is applicable.
Any amounts collected between March 1, 20x1 and May 1, 20x1 should be DEFERRED until May 1, 20x1 as they are collected in advance of the levy period.
.
In the process of aggregating data for the statements of net assets and the statements of activities, some amounts reported as interfund activity and balances in the funds should be eliminated or reclassified.
Eliminations in the statement of activities should be made to eliminate the grossing-up effect.  Interfund receivables and payable should be eliminated in the governmental and business-type activities columns of the statements of net assets, except for the net residual amounts due between governmental and business type activities.  Amounts reported in the funds as receivable from or payable to fiduciary funds should be included as receivables and payables to external parties.  All internal balances should be eliminated in the total column.
In the process of aggregating data for the statements of net assets and the statements of activities, some amounts reported as interfund activity and balances in the funds should be eliminated or reclassified.
Eliminations in the statement of activities should be made to eliminate the grossing-up effect.  Interfund receivables and payable should be eliminated in the governmental and business-type activities columns of the statements of net assets, except for the net residual amounts due between governmental and business type activities.  Amounts reported in the funds as receivable from or payable to fiduciary funds should be included as receivables and payables to external parties.  All internal balances should be eliminated in the total column.
In the process of aggregating data for the statements of net assets and the statements of activities, some amounts reported as interfund activity and balances in the funds should be eliminated or reclassified.
Eliminations in the statement of activities should be made to eliminate the grossing-up effect.  Interfund receivables and payable should be eliminated in the governmental and business-type activities columns of the statements of net assets, except for the net residual amounts due between governmental and business type activities.  Amounts reported in the funds as receivable from or payable to fiduciary funds should be included as receivables and payables to external parties.  All internal balances should be eliminated in the total column.
In the process of aggregating data for the statements of net assets and the statements of activities, some amounts reported as interfund activity and balances in the funds should be eliminated or reclassified.
Eliminations in the statement of activities should be made to eliminate the grossing-up effect.  Interfund receivables and payable should be eliminated in the governmental and business-type activities columns of the statements of net assets, except for the net residual amounts due between governmental and business type activities.  Amounts reported in the funds as receivable from or payable to fiduciary funds should be included as receivables and payables to external parties.  All internal balances should be eliminated in the total column.
In the process of aggregating data for the statements of net assets and the statements of activities, some amounts reported as interfund activity and balances in the funds should be eliminated or reclassified.
Eliminations in the statement of activities should be made to eliminate the grossing-up effect.  Interfund receivables and payable should be eliminated in the governmental and business-type activities columns of the statements of net assets, except for the net residual amounts due between governmental and business type activities.  Amounts reported in the funds as receivable from or payable to fiduciary funds should be included as receivables and payables to external parties.  All internal balances should be eliminated in the total column.
.
.