Page 9 - FINAL CFA I SLIDES JUNE 2019 DAY 7

Session Unit 7:
24. Understanding Income Statements
Barter Transactions, p. 46

Non-monetary exchange – 2 parties exchange goods or services without cash payment

Round-trip transaction -the sale of goods to one party with the simultaneous purchase of almost
identical goods from the same party (facebook to linked ad in and linked to facebook ad!)

U.S. GAAP:

• Revenue from a barter can be recognized at fair value only if the firm has historically
tanties
received cash payments for such goods and services and can use this historical
experience to determine fair value.

• Otherwise, record at the carrying value of the asset surrendered.

Under IFRS:

• Revenue from barter must be based on the fair value of revenue from similar
non-barter transactions with unrelated parties.