Note The GASB issued Statement No. 33 because there was very little professional guidance in existence for recognizing nonexchange transactions on an accrual basis, which the GASB
correctly anticipated was needed when the accrual basis of accounting is used in the government-wide financial statements. In addition, the GASB believed that the existing guidance for nonexchange transactions that are recorded on a modified accrual basis (which continues at the governmental fund level) could also use some clarification and standardization.

This chapter focuses on the accounting for nonexchange transactions from the revenue perspective. Keep in mind, however, that there are similar accounting questions that arise as to when a government would record an expense for a nonexchange transaction. This occurs when one government provides resources to another in a nonexchange transaction. The provider government has an expense and the recipient government has revenue. The concepts in this chapter will be helpful in understanding when provider governments record expenses for these types of transactions.

Taken From : Governmental Accounting Made Easy

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