3.4. Presentation in the financial statements
(CPA Canada Handbook, ch. 3831.17)
The following information should be provided by the auditor and disclosed as notes in the financial statements:
- a) The type of each non-monetary transaction;
- b) The basis for valuation (fair value) of each such transaction;
- c) Related gains and losses, if any.
In the notes regarding its principle accounting policies, an organization must disclose its revenue recognition method. When different methods are applied to different types of revenue-generating transactions, including non-monetary exchanges (barter), the organization must indicate which method was used for each major type of product or service.
Examples of financial statement notes:
Example
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The organization receives free contributions in the form of an exchange of visibility, loans of exhibition spaces, equipment, and human resources. These contributions and the corresponding charges are recognized as income and expenses for the financial year and measured at their fair value when the latter can be reasonably estimated.
Example
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Our non-profit organization is part of a new association, whose objective is to encourage and facilitate barter transactions between its members. As a member of this association, our non-profit has sold its goods in exchange for various supplies and services. These transactions were recorded at the fair value of the exchanged inventory. Over the course of the year, sales of goods in these transactions amounted to $XX, and supplies and services received amounted to $XX, with both amounts presented in our statement of operations.
Example
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Over the course of the year, our organization sold tickets for performances in exchange for advertising and work hours provided by front-of-house volunteers. These transactions were recorded at the fair value of the services rendered and, over the course of the year, totalled $XX (20XX: $XX) and generated no surplus.