How do I account for a 'mess like this one'?

by

What type of things do you think of when you hear of 'tricky situations' when it comes to accounting & bookkeeping? There are all kinds of complexities that most people who take accounting at the vocational school, or bookkeeping at the technical college, just simply don't get exposed to.  Certainly there are situations that are never routinely covered in webinars teaching you how to use a specific type of software. But, the reality is that if you are involved in accounting or bookkeeping very long you will run across some of these 'tricky situations.'

Once such tricky situation might involve 'Barter' arrangements. Even though Barter is actually the oldest form of commerce, it is making a comeback big-time due to the Internet. Today, barter is occurring on a global basis, and the value of bartering many times crosses countries and currencies (values).

Barter is the trading of goods or services between two or more parties without the exchange of currencies or other monetary medium. It involves simply exchanging a specific good (or quantity of goods), or services, in exchange for another good (or quantity of goods), or services between the different parties. "I will barter you so much of this for so much of that!"

Within the United States, the I.R.S. considers bartering a form of revenue and something that must be reported as taxable income. Under Generally Accepted Accounting Principles, businesses are expected to estimate the fair market value of their bartered goods or services. This is done by referring to transactions for similar goods or services performed on a historical basis where the transactions were recorded for monetary value. If it is not possible to report bartered goods or services at fair market value, then the must be recorded at their carrying value.

For tax reporting to the I.R.S., estimated barter values are identical to real values of goods or services for taxation purposes, and that means that the transactions carry the same value as if they were cash transactions. The bartered transactions are reported as income and taxed in the same fiscal period in which the occur. With this said, it should be noted that the I.R.S. does differentiate several forms of barter that give rise to slightly different rules with respect to reporting, therefore you should always consult with your ‘tax professional’ prior to entering into any significant barter arrangement and/or recording or reporting of barter transactions.

Because each barter situation is different, and the rules can vary, then each barter can be tricky, and that’s why you need to understand ‘tricky situations’ like variability of barter transactions with multiple debits and credits involving different rules that may alter how you properly post them within QuickBooks. And that’s why you want to register for Alicia Katz Pollock’s upcoming webinar titled, “Bookkeeping Tricky Situations” at 2 PM Eastern (1 PM Central) on Thursday, October 22, 2020.   

Barter is just one of the tricky situations not routinely taught in bookkeeping classes or accounting courses where it takes an expert with a lot of experience to teach the proper way to account for such transactions, and who is willing to share them in a webinar. Insightful Accountant is offering such a webinar at an amazingly low price of just $49.00.

So, instead of asking yourself, "How on earth do I account for a messy barter situation like this one?" just Register here for our “Bookkeeping Tricky Situations” webinar on Thursday, October 22, 2020 at 2 PM Eastern (1 PM Central). You don't want to miss this opportunity to learn these valuable tricks of the trade. (Murph)