With reference to IPSAS 9 (Revenue from Exchange Transactions): (i) Evaluate the objectives of the standard. (ii) Analyse the difference between 'exchange transactions' and 'non-exchange transactions'.

      

With reference to IPSAS 9 (Revenue from Exchange Transactions):

(i) Evaluate the objectives of the standard.

(ii) Analyse the difference between 'exchange transactions' and 'non-exchange transactions'.

  

Answers


Martin
With reference to IPSAS 9

i) Evaluate the objectives of the standard
The objective of this standard is to prescribe the accounting treatment of revenue
arising from exchange transactions and events and to ensure that revenue by
government entities is well accounted for and catered in the books of account

ii) Analyse the difference between exchange transactions and non-exchange
transactions
Exchange transaction
Exchange transactions are those transactions in which one entity receives assets or
services and directly gives approximately equal value to another party (primarily in
form of cash, goods or services).

In this case, both the government entity and the other party benefit from the
transaction.

Non-exchange transaction

In a non-exchange transaction, an entity receives value from another entity without
directly giving approximately equal value in exchange, or gives value to another
entity without directly receiving approximately equal value in exchange.
This is a one way transaction where the beneficiary is only the government entity
and to the other entity it is a loss / expense e.g. taxes

marto answered the question on February 15, 2019 at 06:30


Next: In the context of IPSAS 23 (Revenue from Non-exchange Transactions), summarize five sources of revenue from non-exchange transactions recognized by this standard.
Previous: In the context of IPSAS 19 (Provisions, Contingent Liabilities and Contingent Assets), explain the meaning of the term 'constructive obligation'.

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