Chapter 5


Sec. 8. Exchangesof Goods or Services for Similar/Dissimilar Good or Services. When goods or services are exchanged or swapped for goods or services which are of a similar nature and value, the exchange is not regarded as a transaction which generates revenue. However, when goods are sold or services are rendered in exchange for dissimilar goods or services, the exchange is regarded as a transaction which generates revenue. The revenue is measured at the fair value of the goods or services received, adjusted by the amount of any cash or cash equivalents transferred. When the fair value of the goods or services received cannot be measured reliably, the revenue is measured at the fair value of the goods given up, adjusted by the amount of any cash or cash equivalents transferred. (par. 17, PPSAS 9)

Sec. 9. Impairment Losses and Allowance for Impairment Losses. When an uncertainty arises about the collectibility of an amount already included in revenue, the uncollectible amount, or the amount in respect of which recovery has ceased to be probable, is recognized as an expense (Impairment Losses), rather than as an adjustment of the amount of revenue originally recognized.

Entities shall evaluate the collectibility of accounts receivable on an ongoing basis based on historical bad debts, customer/recipient credit-worthiness, current economic trends and changes in payment activity. An allowance is provided for known and estimated bad debts.

Sec. 10. Disclosure. An entity shall disclose:

a. The accounting policies adopted for the recognition of revenue, including the methods adopted to determine the stage of completion of transactions involving the rendering of services;

b. The amount of each significant category of revenue recognized during the period, including revenue arising from:

1. Rendering of services;

2. Sale of goods;

3. Interest;

4. Royalties;

5. Dividends or similar distributions; and

6. Amount of revenue arising from exchanges of goods or services included in each significant category of revenue.

Sec. 11. Revenue from Non-Exchange Transactions.Revenue of the NGAs from non-exchange transactions are derived mostly from taxes, gifts and donations, goods in kind and fines and penalties. Most NGAs derive revenues from transactions where they receive resources and provide no or nominal consideration directly in return. These are as follows:

a. Tax Revenue

1. Tax Revenue - Individual and Corporation
2. Tax Revenue - Property
3. Tax Revenue - Goods and Services
4. Tax Revenue - Others

b. Fines and Penalties

1. Tax Revenue
2. Service Income
3. Business Income

c. Shares, Grants and Donations

1. Share from National Wealth
2. Share from Philippine Amusement and Gaming Corporation (PAGCOR)/Philippine Charity Sweepstakes Office (PCSO)
3. Share from Earnings of GOCCs
4. Income from Grants and Donations in Cash
5. Income from Grants and Donations in Kind

d. Revenue from non-exchange transactions may also arise when, in respect of an inflow of resources from a non-exchange transaction, the entity satisfies a present obligation recognized as a liability which may be as follows:

1. Trust Liabilities - Customers' Deposits Payable and Guaranty/Security Deposits Payable
2. Deferred Credits - Deferred Finance Lease Revenue and Other Deferred Credits
3. Unearned Revenue - Unearned Revenue - Investment Property and Other Unearned Revenue

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