Revenue 85
eliminated in consolidation so that only grants from
foreign governments and international organizations
would remain in the general government accounts.
Grants may be classifi ed as capital or current and
can be receivable in cash or in kind (see paragraphs
5.103–5.105).
5.6 Other revenue (14) is all revenue receivable ex-
cluding taxes, social contributions, and grants. Other
revenue comprises: (i) property income; (ii) sales of
goods and services; (iii) fi nes, penalties, and forfeits;
(iv) transfers not elsewhere classifi ed; and (v) pre-
miums, fees, and claims related to nonlife insurance
and standardized guarantee schemes (see paragraphs
5.106–5.151).
5.7 Refunds (see paragraph 5.27) and corrections
of erroneously collected revenue are transactions
that decrease the net worth of the recipient govern-
ment unit. More accurately, they are adjustments that
allow the excessive increase in net worth previously
recorded to be corrected. Th ese refund transactions
are recorded as a reduction in revenue, with a corre-
sponding reduction in fi nancial assets or an increase
in liabilities.^6
5.8 Some transactions are exchanges in assets
and/or liabilities and should not be recorded as rev-
enue. Th e disposal of a nonfi nancial asset, other than
inventories,^7 by sale or barter does not aff ect net
worth and these transactions are not revenue. Th ey
are transactions in nonfi nancial assets as described in
paragraphs 8.3–8.4. However, when ownership of an
asset is acquired without having to give up anything
of commensurate value in return, the net worth of the
unit increases. Th is increase in assets has a counter-
part entry in an increase in revenue and should be
recorded as a type of capital transfer receivable, such
as a capital grant. Repayments on loans previously
extended to other institutional units, and loan dis-
bursements, are not revenue. Th ese are transactions
in fi nancial assets or liabilities as described in para-
graphs 9.3–9.4.
5.9 For the purposes of fi scal analysis, additional
aggregations of revenue could be calculated, such as
the fi scal burden, direct versus indirect taxes, and
(^6) Similarly, refunds of expense are recorded as a reduction in
expense, rather than revenue (see paragraph 6.4).
(^7) For a description of the treatment of inventories, see paragraphs
8.44–8.47.
revenue related to natural resources. A discussion
of these supplementary fi scal indicators and their
uses in fi scal analysis is presented in the annex to
Chapter 4.
Time of Recording and Measurement of Revenue.
5.10 In the Statement of Operations, revenue should
be recorded according to the accrual basis of record-
ing. In the accrual basis of recording, transactions are
recorded when the underlying activities, transactions,
or other events occur that create the unconditional
claims to receive the taxes or other types of revenue
(see paragraphs 3.69–3.102). Th e application of the
general rule to various types of revenue is indicated in
each section of the classifi cation as needed.
5.11 In the Statement of Sources and Uses of Cash,
cash receipts from operating activities are recorded
in accordance with the cash basis of recording. In
the cash basis of recording, transactions are recorded
when cash payments for the respective revenue cat-
egories are received (see paragraph 3.103–3.104).
5.12 According to the accrual principles of GFS,
income taxes and social contributions based on in-
come should be attributed to the period in which the
income is earned, even though there may be a signifi -
cant delay between the end of the reporting period
and the time at which it is feasible to determine the
actual liability of the taxpayer.
5.13 Conceptually, when using the accrual basis of
recording, the time between the moment a revenue
transaction accrues and the payment is received (or
made in the case of refunds) is bridged by recording a
transaction in fi nancial assets or liabilities (see para-
graph 7.224). In cases where a prepayment of revenue
covering two or more reporting periods is made to
government, government should record an increase
in liabilities, usually recorded in other accounts pay-
able (3308), for the revenue that falls due in future
periods. In eff ect, this is a fi nancial advance made to
government by the payee. It constitutes a liability of
the government and an asset of the payee. Th is liabil-
ity is extinguished as the revenue falls due in future
periods.
5.14 In practice, however, some fl exibility is per-
mitted as the accrual recording of revenue can be dif-
fi cult to implement because government accounting