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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

General Accounting

Specialized Accounting
Non-Monetary Transactions

Per GASB 62, non-monetary transactions involve an exchange of principally non-monetary assets and liabilities with another entity (reciprocal transfer).

Non-monetary transactions do not apply to:

  • A government combination
  • A transfer of non-monetary assets solely between reporting units within the same reporting entity
  • Non-exchange transactions

Basic Principle

Some exchanges of non-monetary assets involve a small monetary consideration (referred to as “boot”), even though the exchange is essentially non-monetary.

  • Accounting for non-monetary transactions is based on the fair value of the assets (or services) involved
  • Recognize gain or loss

Gain or loss on a non-monetary exchange is computed as:

Fair value of the asset given (FV) – Book value of the asset given (BV) = Gain (loss)

If the fair value (FV) of the asset given up cannot be determined, assume it is equal to the fair value of the asset received. If neither fair value can be determined, then gain or loss cannot be computed. The asset received is generally recorded at the fair value of the asset surrendered (or the FV of the asset received if “more clearly evident”). The asset given up will always be removed from the books at book value (BV).

The following rules apply in recording non-monetary exchanges:

  • Losses are always recognized (conservatism)
  • Gains are recognized when dissimilar assets are exchanged (for example, a machine for a truck).
  • Gains are not recognized when similar assets are exchanged (for example, a machine for a machine) because the earnings process is not considered complete.
  • The asset received is recorded at the fair value of the asset given up (or the fair value of the asset received if “more clearly evident”) whenever gains and losses are recognized.
  • The asset received is recorded at the book value of the asset given up when gains and losses are not recognized. Gains and losses are not recognized when:
    • Earnings process is not considered complete
    • Gain or loss cannot be computed

Modification of Basic Principle

Accounting for a nonmonetary transaction is not based on the fair values of the assets exchanged unless those fair values are determinable within reasonable limits.

  • Fair value is not determinable if earning process is not complete
  • Non-monetary asset surrendered is based on the recorded amount

Exchange of non-monetary assets based on recorded amount may involve monetary consideration.

  • Government receiving monetary consideration recognizes gain to the extent that the monetary receipt exceeds a proportionate share of the recorded amount of the asset surrendered.
  • Government paying monetary consideration
    • Does not recognize gain, but may recognize loss
    • Records the asset received at amount of monetary consideration plus the recorded amount of non-monetary asset surrendered


Disclose the following information for non-monetary transactions that occurred during the fiscal year in the Other Text box of the CANSS web application:

  • Nature of the non-monetary transactions (include a breakdown by capital asset type and COBJ used)
  • Basis of accounting for the assets exchanged
  • Gains or losses recognized on those exchanges
Glenn Hegar
Texas Comptroller of Public Accounts
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