by Bob Meyer, Editor of BarterNews
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From the desk of Bob
The Changing Corporate Barter
CVS/pharmacy with 5,400 stores in 37
states is the largest pharmacy retailer in America.
They made headline news recently when it was
announced that an informal inquiry by the Securities
and Exchange Commission (SEC) was looking into how
the company accounted for a barter transaction in
In short, CVS exchanged plush toys
and received $42.5 million in trade credits. CVS
also made a cash payment of $12.5 million to the
What comes into play here with the
SEC, is the question of recognition, i.e. how the
trade credits should have been valued on the
company?s books. This subject was addressed in
November 1993, when the Financial Accounting
Standards Board (FASB) published Issue No. 93-11,
?Accounting for Barter Transactions Involving Barter
In 1994, we hired an expert CPA and
former FASB board member to write a concise report
for publication in BarterNews. We paid him a
five-figure check for his critique on the new
ruling. (The sum of his concise 8-page report is
included in our FastStart II Corporate Barter
There are several factors that come
into play when accounting for barter transactions
involving corporate barter credits, too numerous to
But the point is that this
information is available, and the CVS executives may
have failed to do their homework before accepting
$42.5 million in barter credits. In which case they
would lack an understanding of how the barter
credits should have been ?booked? and subsequently
used. The two executives responsible for those
decisions have recently resigned.
FASB?s ruling was one issue that
brought change to the corporate barter industry...an
industry that reached its zenith, in my opinion,
back in the early 1990s.
I say that because in February of
1991 IRTA?s Corporate Trade Council hosted the
second annual spring meeting and conference on
corporate barter. Over 100 members of the commercial
barter community met at the New York Hilton. It was
an impressive group of barter specialists, and an
exciting time as the industry looked forward to
unprecedented growth in the corporate sector.
Keynote speaker Moreton Binn?s talk
was titled, ?Welcome to 1991?Year of the Miracle.?
Binn reviewed his experiences with the barter
industry of the ?80s and then emphasized the need
for expansion overseas. Two years later FASB?s
ruling went into effect. And IRTA?s Corporate Trade
Council, established in 1990 and very active for
several years, slowly lost momentum and is no longer
In addition to FASB?s EITF 93-11
ruling, which altered the rules of corporate trade,
other factors have affected the corporate barter
arena. They include the Sarbanes-Oxley Act passed by
Congress that tightened corporate governance
procedures; the emergence of the Internet with the
online liquidators and auctions, and a proliferation
of outlet stores for manufacturers of all types to
move excess merchandise. Plus there is the
industry?s fulfillment challenges and capabilities.
Caution Is Good Advice When Trading
Outside Of Your Realm
When the Gemological Institute of
America (GIA) recently fired four employees for
violating the group?s code of ethics, which
prohibits contact between employees and clients and
the exchange of gifts, it brought back memories of
the early 1980s when bartering gemstones became
quite popular as a trading currency.
Back then the trading was primarily
done on a 1:1 basis, (often at the Zander Board
meetings which were held in various cities) rather
than through barter exchanges. It was a time to be
very careful, as gemstone appraisals were handled in
a rather unprofessional, even slipshod manner. The
operative phrase was ?buyer beware.?
published a series of articles in
four consecutive issues, beginning with Issue #8.
The author and gemstone expert was Paul Durand, who
also had 30-years experience as an gemcutter. His
contrarian thinking provided our readers with advice
and knowledge on the little understood subject of
gems. And hopefully saved some of our readers from
making costly mistakes.
New U.S. & Canadian Listings In Our
Barter Contacts Section
Working in conjunction with the ITEX
corporate staff, we have completed and posted all of
the ITEX offices (including former BXI offices) in
the U.S. and Canada.
U.S. ITEX Offices:
Canadian ITEX Offices:
TeleTrade Announces Large Trading Volume Increase
TTi (TeleTrade International),
announced that its international service center for independent
trade exchanges saw a remarkable 56% increase in total combined
trade volume for its online systems...posting $5,148,275 for
February 2006, versus $3,296,496 for February 2005.
CEO Gary Lasater reports total trade activity for the first two
months of 2006 was $19,023,093, and the total of all online activity
since 1999 exceeds $364,000,000. TTi, the creator of the
technology, now offers four ways of authorization approval: online,
telephone, real-time e-mail, and swipe card.
information contact Gary Lasater at (303) 840-7172 ext. 1, or e-mail
Growth and Use of Secondary Capital (New Money) Creates
Unprecedented Wealth In Today?s New Age Of Possibility
There are many forms of secondary capital?which can
be defined as any financial instrument that measures and
communicates value in a common language. Would you like to see and
learn more about the many forms of secondary capital?
We have 75 free,
informative and inspiring, articles for you in our ?Secondary
Capital Section.? Check it out...
Acquires Rival Tradebart Australia
Managing Director Michael Touma has announced the Business Barter
Exchange (BBX) acquisition of Tradebart Australia?s membership base,
the third largest barter exchange in Australia.
Touma says the latest move complements the procurement of Tradebart
New Zealand?s membership late last year, and will provide a
significant boost to the BBX business base in Australia as it
represents a 10% increase in membership for the company.
BBX is currently
exploring master franchise opportunities in Southeast Asia. For
further information see
Trade Exchange Owners...
Then it?s time to
grab-a-hold of the most powerful marketing tool in the barter
industry! The Competitive Edge newsletter is a monthly, ready
to use, professional 4-page publication...no work is needed! (Click
Would You Like To Make 2006 Your Greatest Year Ever?
Business2Consumer Barter Model Update
Director Nicholas Iverson of MyExNet Limited has provided
BarterNews with an update on their B2C aspirations, which have
been underway for several years. The proposed system requires a
registered prospectus prior to launching.
Nicholas emphasized their model is ?seriously different? from other
trade exchange operations. For more information visit
New Money-Making Ideas And Valuable Contacts!
You can obtain
useful, informative ideas and contacts in every available back-issue
Karen Welch Names Her Biggest
One of the classiest ladies I?ve met in the commercial barter
industry is Karen Welch. A conversation with Welch is always
fascinating because she is quick, direct, and not afraid to speak
her mind. She also runs a terrific exchange in Polson, Montana,
We recently had a chance to exchange some ideas, and the following
is her perspective on several topics. . .
Barter prices: ?I guess everyone has their way of doing things, but
ln Montana we don?t buy overpriced products and services just
because it?s available on trade. My biggest competition is cash. By
far. People here simply won?t spend more than what is reasonable on
Our market: ?I believe that we have a way, way different market here
than most anywhere else. Our communities are very small, and it is
impossible to just run through people as word gets around very
quickly. We have to have a good reputation. Thankfully, I can
barely keep up with the referrals that we?re getting now.?
?I?ve been saying the same thing year after year about pricing and
service, so much so that I?m beginning to get bored listening to
myself. I?m on a major campaign to educate all of our new members on
how to use their trade income to increase profits, and I?ve found
your weekly e-mail Tuesday Report and the monthly
Competitive Edge newsletter help me hugely. I appreciate your
work. I also like your list of barter companies on the web site.?
A Gift To A Friend Or Associate. If you know someone
who might benefit from this newsletter, feel free to forward it
to them! (See the “box” at the end of the newsletter
for the forwarding service.)
Arbitron Launches More Accurate Measurement For Radio Audiences
Arbitron, the leading provider of radio ratings, is moving beyond
their paper diary record-keeping days, by offering radio advertisers
a more accurate way to measure their audience. The New York company
currently bases its audience estimates on paper-and-pencil record
keeping by a selected group of listeners.
This summer a 50-city rollout of its ?Portable People Meter.? It is
a small device that can clip onto a belt, and will provide the most
accurate measurement yet of which radio stations people listen to
and for how long.
The People Meter automatically notes everything its wearer listens
to in the course of a day, using encoding technology to recognize
which radio station, or even which retailer?s in-store music, a
Clear Channel Follows Suit
Similarly, Clear Channel Communications has announced they will test
a new radio measurement device in its Houston market, a step toward
putting Arbitron?s monopoly in radio audience measurement at risk.
The new device is a mobile-phone based system developed by The Media
Audit, a business of International Demographics of Houston, in
partnership with Paris-based Ipsos. The system works by giving
participants devices called Smart Cell Phones that track radio
listening by picking up an encoded signal.
advertising was flat at $20 billion last year, radio executives
argue that if advertisers understood how much radio people listen
to, they would use the medium more.
barter company in the world is listed on our web site,
click through to our Global List
of Barter Companies.
Estate Still Most Popular Among Affluent
A Bloomberg/Los Angeles Times telephone poll of 2,563 adults
nationwide from February 25 to March 5 indicated the following:
Affluent U.S. investors are optimistic about their returns this year
and say that Asia will offer the best returns over the next 12
months. Sixty percent of affluent investors expect returns of 10% or
more in 2006.
Fifty-one percent name Asia as the region with the best investment
climate, more than twice the number who say the United States. Only
6% favored Europe, which was seen as all tangled up in regulation.
Where would they put
$1 million today? Three in 10 say real estate, 22 percent say
stocks, 14 percent favor mutual funds, and 8 percent would choose
Here & There. . .
A couple of years
ago there was considerable debate over outsourcing. But the
American ?job machine? has averaged a net increase of nearly
200,000 new jobs a month in 2005. The employment expansion has
occurred in financial services, software design, medical
technology and other growth industries, dwarfing the smaller job
losses in the domestic auto industry.
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news...real gains for families in the value of their assets
continues to grow. According to the Federal Reserve, in 2005
Americans owned an all-time high level of wealth (mostly housing
and stocks), valued at $51.09 trillion. Additionally, Americans?
assets are rising in value faster than they are taking on debt.