BARTER OF CORPORATE ASSETS AS A PREVENTION OF INSOLVENCY IN TIMES OF ECONOMIC SHOCKS (ACCOUNTING ASPECTS)
BARTER OF CORPORATE ASSETS AS A PREVENTION OF INSOLVENCY IN TIMES OF ECONOMIC SHOCKS (ACCOUNTING ASPECTS)

Summary/Abstract: The barter in its classic form, known for millennia, is based on the simple concept that two persons (natural or legal) agree by determining the relative value of their goods and services and offer them to each other on equal terms. A number of researches for centuries have proven the thesis that the monetary economy is much more efficient and adequate than the barter economy. Nevertheless, objective analysis shows that barter has both advantages and disadvantages. This article presents barter as a transaction and the barter system as the environment in which barter transactions take place. The subject of the article are the accounting aspects of the barter exchange of assets between enterprises as a result of appropriate management decisions. This article aims to outline the benefits of barter as a prevention of enterprises‘ insolvency in times of economic shocks by presenting modern IFRS - accounting concepts for reporting the barter of assets between reporting entities. Barter between enterprises becomes an attractive form for settling business relations when there are processes of economic downturns and recessions. In the context of the coronavirus epidemic, which appeared in early 2020, barter is flourishing. Barter has been actively used as an alternative management strategy for micro and small enterprises on a global scale. The advantage of barter transactions is that the focus is on the exchange value (relative price) of the assets and not on their nominal price.Modern barter transactions between reporting entities are performed using digital technology in places called barter exchanges. Online barter exchanges became popular with small enterprises after the 2008 financial crisis. As prospects and sales decreased, small enterprises increasingly turned to barter exchanges to generate revenue. The exchanges enabled members to find new customers for their products and get access to goods and services using unused inventory. A barter exchange is an organization that serves as a third party to coordinate barter transactions between members of the organization and as a bank to keep track of the value of barter transactions and the value of each member's account. For the provided services barter exchanges charge an initial membership fee, a transaction percentage, and a monthly maintenance fee. In geographical scale barter transactions have their own specific characteristics which allow to form different patterns of barter activity. From international point of view, the more important ones are the American, Russian and European (Swiss) models. The leading organization in the field of barter transactions is established and operating in the USA International Reciprocal Trade Association (IRTA). IRTA was founded in 1979 with a view to:  foster the common interests of the commercial barter industry in the United States and worldwide, and to uphold high standards of ethical business practice.  work with all sectors of the barter industry to preserve, protect and enhance the industry.  interface with governmental agencies, the media and the public to promote the numerous benefits of barter systems as an important component for economic development.  conduct research into contracts, securities and tax laws and accounting principles applicable to the retail barter, corporate barter, complementary currency systems and counter trade organizations. IRTA provides global inter-exchange trading platform in the world through its subsidiary - Universal Currency Clearinghouse, Inc. (UC). In 2019 UC set record in barter transactions by doing over 14.5 million dollars of inter-exchange trading between its members

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