Accounting question : Barter accounting...?

Question

Please explain me how to record barter accounting transaction...........

Answer 1

One entity may enter into barter agreements with another entity for:

(1) Assets/goods provided for services received;
(2) Assets/goods provided for assets/goods received;
(3) Services provided for assets/goods received;
(4) Services provided for services received;
(5) The use of fixed assets for assets/goods or services received; or
(6) The use of fixed assets for the use of fixed assets.

An entity must account for barter transactions based on the fair values of the assets/goods or services involved. The value of the assets/goods acquired in exchange for assets/goods or services provided should be recorded in the accounting system at the fair value of the assets/goods or services provided. If the fair value of the assets/goods or services provided is not easily obtainable, then the transaction should be recorded based on the fair value of the assets/goods or services received. If neither fair value is determinable, then the assets/goods or services received should be recorded at the carrying value of the assets/goods or service VA provided.

An entity can establish the fair value of non-monetary assets/goods or services by referring to:
(1) Estimated realizable value in cash transactions of similar assets/goods or services;
(2) Quoted market prices;
(3) Independent appraisals;
(4) Estimated fair values of assets/goods or services received in exchange; or
(5) Other available evidence.

Let's say you bartered services, you provide a/cg svcs and received legal svcs. You debit the fair value of the a/cg svcs rendered and you credit the fair value of the legal svcs received. This is not a simple topic. You need to read the articles at the links to understand more.

Answer 2

it extremely is a huge device of “doing corporation’ for start up-ups; despite the fact that, the reality keeps to be that bartering isn't a loose device. The IRS will nonetheless desire their shrink even nonetheless their is not any funds replace – superb suited? So, in an identical thank you to the money multiplier, the place funds circulates approximately 7 cases its fee in a interior of sight economic device, so too, the bartering device turns right into a distinctive tax gross sales device for the government besides the reality that it extremely is a “cashless” transaction.

Answer 3

Treat all transactions just like you would a cash transaction.
As long as you're trading for a business expense it can be written off.
http://www.u-exchange.com/bartering-legalities

Answer 4

You are referring to an in-kind exchange. Assign it value and apply as credit or debit as applicable.