For which type of nonexchange transactions are revenues recognized when all eligibility requirements are met?

• A. Voluntary nonexchange transactions
• B. Derived tax
• C. Imposed nonexchange transactions
• D. Exchange transactions

Answer: (A)

This item tests how GASB handles the timing of revenue recognition for nonexchange transactions, specifically voluntary ones. In voluntary nonexchange transactions, funds are provided without an equal value received, and the recipient must meet eligibility criteria set by the program or agreement. Because the funding depends on meeting those conditions, revenue is recognized only after all eligibility requirements are satisfied. This ensures recognition aligns with actual access to the resources rather than simply when the money is promised.

For comparison, derived tax and imposed nonexchange Revenues are recognized when the underlying tax is measurable and available or when the tax is assessed and the amount is known, not tied to meeting program eligibility. Exchange transactions involve a direct exchange of value and follow different revenue timing rules.