On March 21, the Governmental Accounting Standards Board (GASB) issued a proposal that would specify the accounting and financial reporting for "nonexchange" transactions. This type of transaction is one in which a state or local government gives or receives something of value and does not directly give or receive something of equal value in return.
The proposal applies only to transactions involving financial or capital resources.
GASB has classified nonexchange transactions into four categories: derived tax revenues, for example, sales and income taxes; imposed nonexchange transactions other than derived taxes, such as property taxes and fines; government-mandated nonexchange transactions, like federal programs that state or local governments are required to perform; and voluntary nonexchange transactions, such as grants or private donations.
Under the proposal, state and local governments would be required to recognize nonexchange transactions in their financial statements when an enforceable legal claim arises or when certain eligibility requirements are met, depending on the class of nonexchange transaction.
Comments on the proposal are requested by June 20 and public hearings will be held around the country in June, July and August.
(One copy of the proposal is available without charge until the comment
deadline from the GASB Order Department, 401 Merritt 7, P.O. Box 5116, Norwalk,
CT 06856-5116; phone: 203/847-0700, ext. 555.)