PSAB Exposure Draft – Revenue, Proposed Section PS 3400
May 01, 2017
On May 1, 2017, the Public Sector Accounting Board (PSAB) issued an Exposure Draft that proposes a framework describing two categories of revenue – exchange and unilateral. Stakeholders are encouraged to submit their comments by August 15, 2017.
The PSAB proposes, subject to comments received following exposure, to issue a new Section on revenue.
The main features of the Exposure Draft are as follows:
- A framework for revenue is proposed describing two categories of revenue — exchange transactions or unilateral transactions.
- If the transaction gives rise to one or more performance obligations, it would be an exchange transaction.
- Performance obligations are enforceable promises to provide goods or services to a payor as a result of exchange transactions.
- Revenue from an exchange transaction is recognized when the public sector entity has satisfied the performance obligation(s).
- The performance obligation(s) may be satisfied at a point in time or over a period of time.
- If no performance obligations are present, it would be unilateral revenues.
- Unilateral revenues result in increases in the economic resources of a public sector entity without a direct transfer of goods or services to the payor.
- Unilateral revenues are recognized when a public sector entity has the authority to claim or retain an inflow of economic resources and a past event gives rise to a claim of economic resources.
The new Section would apply to fiscal years beginning on or after April 1, 2021. Earlier adoption is permitted. The Section would be accounted for as a change in accounting policy applied retroactively with restatement of prior periods.
Review the Exposure Draft on the PSAB's Web site.