When you barter goods and/or services, how are these accounted for in your sales?

Question

Quizplus · Accepted Answer

Barter transactions should be accounted for at fair market value, even though no money changes hands. Fair market value is the price that an asset would fetch in the open market under normal operating conditions. This value can be measured by the cash equivalent value of the goods or services received in exchange. By accounting for barter transactions at fair market value, you will be able to accurately report your sales and expenses in your financial statements. It will also help you in calculating your tax obligations, as barter transactions are generally taxable.

When You Barter Goods And/or Services, How Are These Accounted