“Fee” received by an entity Is the fee received for a (compulsory) licence or another administrative function performed by government? Yes No Does the entity exercise a regulatory function by, for Fee received as a result e.g.? of goods and services Checking compliance with qualifications provided by the entity Checking safe and effective functioning of directly to the entity equipment paying the fee Exercising other forms of control Note: The entity paying the fee should be the recipient of the “regulatory services”, i.e. there is a direct exchange of value between the two entities. No Yes No Yes Is the fee approximately equal to the fair value of Fee classified Is the fee significantly the goods and services as a higher than the fair provided? exchange value (cost) of providing transaction the service? (as approximately equal value not exchanged between the parties) No Yes Yes No Fee = exchange revenue Difference between FV of goods and services and fee received = foregone revenue (no accounting implications). Consider whether any disclosure should be made in the financial statements of the free/subsidised goods and services provided. Classify as non-exchange revenue (consider Fee = exchange revenue Fee – definitions in GRAP 23 of a Difference between FV of goods and tax and a transfer) services and fee received = foregone Revenue revenue (no accounting implications) Consider whether any disclosure should be made in the financial statements of the free/subsidised goods and services provided.
“Fee” received by an entity Is the fee received for a (compulsory) licence or another administrative function performed by government? Yes No Does the entity exercise a regulatory function by, for e.g.? Checking compliance with qualifications Checking safe and effective functioning of equipment Exercising other forms of control Note: The entity paying the fee should be the recipient of the “regulatory services”, i.e. there is a direct exchange of value between the two entities. Fee received as a result of goods and services provided by the entity directly to the entity paying the fee No Yes No Yes Is the fee approximately equal to the fair value of the goods and services provided? Fee classified as a transaction (as approximately equal value not exchanged between the parties) Is the fee significantly higher than the fair value (cost) of providing the service? No Yes Yes No Fee = exchange revenue Difference between FV of goods and services and fee received = foregone revenue (no accounting implications). Consider whether any disclosure should be made in the financial statements of the free/subsidised goods and services provided. Classify as non-exchange revenue (consider definitions in GRAP 23 of a tax and a transfer) Fee = exchange revenue Difference between FV of goods and services and fee received = foregone revenue (no accounting implications) Consider whether any disclosure should be made in the financial statements of the free/subsidised goods and services provided. Fee – exchange Revenue
03.%20Draft%20Exposure%20-%20Exchange_Non%20Exchange%20-%2004%20November%202016.docx