Question

What is the difference between an exchange and a nonexchange transactions?

Answer 1

An exchange or exchange-like transaction are defined by one party to the transaction who is receiving a store of value in exchange for sacrifices something; or taking on liabilities to acquire a item or service, or surrendering a store of value. For example, this type of transaction fits what are called program service fees in the NPO world.

In contrast, non-exchange transactions, or contributions are defined as unconditional transfers of stores of value without directly providing value in exchange. For example, the voluntary donations of cash and other non-cash assets to an NPO without any direct receipt of anything of substantial value in return