FASB ASC 845 – Non-monetary Transactions

The Financial Accounting Standards Board (FASB) released the 800 section of the Accounting Standards Codification for the purpose of discussing broad topics.

Accounting Standards Codification 845 (ASC 845) was released to address the more specific topic of non-monetary transactions. This would be considered a transaction where non-monetary goods are exchanged for other goods, services for services, or a combination of the two. As most all accounting transactions are recorded at cost, this requires a special set of rules to ensure that they are recorded fairly and consistently across companies.

Types of Non-Monetary Transactions

Barter Transactions – Exchanging a good/service for another good/service that have monetary value
Exchanges with Monetary Consideration – This would include part of the transaction is a good/service and part of it includes money
Exchanges of Stock – This would come into play when the stock represents a non-controlling interest in a company
Buying and Selling Inventory within a company
These transactions happen in the real world every day. Some examples would be when two sports teams exchange a players contract for another player contract, or when two companies exchange real estate for real estate.

For more in depth information on this and other FASB ASC topics, check out the following books.

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