Academic journal article Journal of Accountancy

GASB Statement No. 36 Alters Accounting for Shared Revenues

Academic journal article Journal of Accountancy

GASB Statement No. 36 Alters Accounting for Shared Revenues

Article excerpt

In April, GASB issued Statement no. 36, Recipient Reporting for Certain Shared Nonexchange Revenues, which alters previous guidance on accounting for certain shared revenues. The new statement amends paragraph 28 of Statement no. 33, Accounting and Financial Reporting for Nonexchange Transactions.

Since GASB issued Statement no. 33 in December 1998, questions have arisen concerning the differences between the provisions of paragraph 28 of Statement no. 33 and the recognition requirements for government-mandated and voluntary nonexchange transactions, examples of which are certain grants and most donations.

The new guidance requires governments that receive shared derived tax revenues (for example, sales and income taxes), or shared imposed nonexchange revenues (for example, property taxes) to account for the sharing either as a voluntary or government-mandated nonexchange transaction, whichever is appropriate. An example of the latter transaction is federal government mandates concerning state and local governments.

Statement no. 36 also changed another aspect of recording shared revenue. Paragraph 28 of Statement no. 33 had said some recipient governments might not be able to obtain or reasonably estimate the accrual information necessary to record a nonexchange transaction and, therefore, should accrue revenue equal to cash received, adjusted for amounts that are attributable to prior periods. …

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