Exchange or non-exchange – what to consider?

The Public Sector Accounting Forum (PSAF) noted  whether a transaction is exchange or non-exchange where assets are exchanged for services may be unclear.

The PSAF considered that:

•  The specific arrangement should be assessed to establish whether an asset is being exchanged for services and whether the asset and services are of approximately equal value. If so, the transaction could be an exchange transaction. If not, it could be non-exchange. 
• Other factors to consider include whether the “return service” is certain or conditional on uncertain future events, and when and for how long the “return service” is to be provided.
• Where a transaction has components that are exchange and non-exchange, the components are accounted for separately. The whole transaction is accounted for as non-exchange where the components cannot be separated.