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The Tuesday Report

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March 21, 2006

Written by Bob Meyer, Editor of BarterNews

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From the desk of Bob Meyer...              3/21/06

The Changing Corporate Barter Marketplace

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 2000.

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 barter company.

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 Credits.�

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 Program.)

There are several factors that come into play when accounting for barter transactions involving corporate barter credits, too numerous to cover here.

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 operation.

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.�

BarterNews 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:

http://www.barternews.com/mappage/default.htm

Canadian ITEX Offices:

http://www.barternews.com/mappage/canada/default.htm
 

TeleTrade Announces Large Trading Volume Increase

TTi (TeleTrade International), www.eValues.net, 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 eValues.net technology, now offers four ways of authorization approval: online, telephone, real-time e-mail, and swipe card.

For further information contact Gary Lasater at (303) 840-7172 ext. 1, or e-mail gary@teletrade.net

The 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... www.barternews.com/secondary_capital.htm.

BBX 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 www.ebbx.com.

Trade Exchange Owners...
Would You Like To Make 2006 Your Greatest Year Ever? 

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 here.)

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 www.exnet.cc.


Get New Money-Making Ideas And Valuable Contacts!

You can obtain useful, informative ideas and contacts in every available back-issue of BarterNews.


Karen Welch Names Her Biggest Competitor

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, www.WeTradeNetwork.com.

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 trade.�

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.�

Other comments: �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.� 

Give 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 listener heard.

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.

Although radio 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.

Every barter company in the world is listed on our web site, click through to our Global List of Barter Companies.


Real 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 bonds.

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.
     

  • Have you signed up to receive a summary via e-mail of the Tuesday Report every week? If not, go to the top of this issue (right hand corner) and sign up!
     

  • More good 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.

The Barter MarketPlace
Top Barter Companies In The USA

We welcome your comments, questions, and observations.
� Copyright BarterNews 2006. Redistribution of BarterNews content expressly prohibited without the prior written permission of BarterNews.

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