Accounting for Revenue and Non-Exchange Expenses
This Consultation Paper discusses two potential approaches for recognition of revenue for transactions that have performance obligations or stipulations:
- The Exchange/Non-Exchange Approach – which maintains the principles within IPSAS 23, Revenue from Non-Exchange Transactions (Taxes and Transfers)but identifies five options for updating that Standard; and
- The Public Sector Performance Obligation Approach for Revenue - where revenue is recognized when identified performance obligations have been met
It also discusses two potential approaches for recognition of non-exchange expenses:
- The Extended Obligating Event Approach - relies on the IPSASB’s Conceptual Framework to determine when a resource provider has a liability and an expense; and
- The Public Sector Performance Obligation Approach for Expenses – mirrors the equivalent revenue approach but adapted for non-exchange expenses.
The Consultation Paper also discusses:
- Implementation issues regarding recognition of revenue from capital grants and services in-kind;
- Initial and subsequent measurement of non-contractual receivables; and
- Subsequent measurement of non-contractual payables.