Distinguishing Contributions from Exchange Transactions

Distinguishing Contributions from Exchange Transactions

NCWVCAA may receive income in the form of contributions, revenue from exchange transactions, and income from activities with characteristics of both contributions and exchange transactions. NCWVCAA shall consider the following criteria, and any other relevant factors, in determining whether income will be accounted for as contribution income, exchange transaction revenue, or both:


1. NCWVCAA’s intent in pursuing the asset, as stated in the accompanying materials;


2. The expressed intent of the entity providing resources to NCWVCAA (i.e., Does the resource provider state its intent is to support NCWVCAA programs or that it anticipates specified benefits in exchange?);


3. Whether the method of delivery of the asset is specified by the source provider (exchange transaction) or is at the discretion of NCWVCAA (contribution);


4. Whether payment received by NCWVCAA is determined by the resource provider (contribution) or is equal to the value of the assets/services provided by NCWVCAA, or the cost of those assets plus a markup (exchange transaction);

5. Whether there are provisions for penalties (due to nonperformance) beyond the amount of payment (exchange transaction) or whether penalties are limited to the delivery of assets already produced and return of unspent funds (contribution); and


6. Whether assets are to be delivered by NCWVCAA to individuals or Agencies other than the resource provider (contribution) or whether they are delivered directly to the resource provider or to individuals or Agencies closely connected to the resource provider.