September 30, 2003
Written by Bob Meyer, Editor of BarterNews
CEO Magazine's Editor Writes Article On The Right Way To Barter
In the October issue of Entrepreneur, Ms. Prince, the executive editor of CEO Magazine, wrote a fine article on the way corporations should transact "direct trades" with one another. (The following is a brief recap.)
Quoted in the article was Mark DeFond, professor of accounting at the University of Southern California's Leventhal School of Accounting in Los Angeles. He pointed out that companies should simply exchange services, rather than constructing two separate transactions, with each side writing a check to the other. In that way no accounting games are played.
J. Edward Ketz, associate professor of accounting at Pennsylvania State University, says it's all in how you account for swaps, and the rules are quite clear: "If the swap involves dissimilar resources—a car for a computer, for example—then record the new asset at its fair value, take off the swapped asset at its book value, and record the difference as a gain or loss." And "if the swap involves similar resources, one bandwidth for another, then record the new asset at the book value of the swapped asset. Don't recognize any gain or loss."
Joe Carcello, associate professor of accounting and business law at the University of Tennessee, Knoxville, says the challenge comes when you have to assign a price tag to a product or service that's difficult to value. Both parties have to demonstrate that they made a good faith effort to come up with a defensible valuation. "Don't walk into the transaction with the intent of trying to boost revenues as a result of the structure of the transaction. Account for the transaction on its economic merit."
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ITEX Continues Divesting Corporate Offices
In June, ITEX (OTCBB:ITEX) announced its intent to sell all five of its corporate-owned brokerages. In August two were sold, and a third, located in Sacramento where the company is headquartered, is expected to close in October.
Ms. Kristen Feuz, currently the Senior Trade Director for the Sacramento office, has signed a Letter of Intent with the ITEX Corporation. She will be the principal shareholder of a newly formed corporation to complete the transaction.
Steven White, Chairman of the Board said, "Ms. Feuz has worked with ITEX since 1993 and knows the Sacramento client base. She's well respected within the ITEX broker network; we believe her expertise, enthusiasm, and drive will create an upward revenue trend for this office."
White explained that selling corporate-owned brokerages will enable the company to reduce overhead while pursuing the company's goal of focusing on the expansion of the existing broker network. For more information contact firstname.lastname@example.org, or www.itex.com.
Every barter company in the world is listed on our web site, click through to our Global List of Barter Companies.
Bentley Enters Into Agreement To License VirtualBarter
Bentley Communications (OTCBB:BTLY) has entered into an agreement in principal with VirtualBarter to license the exclusive North American rights to its online barter management system and integration with its global trade marketplace.
VirtualBarter is produced by Independent Broker Alliance. (Bruce Kamm, well-known within the barter industry, has been the architect of VirtualBarter.) The software offers exchanges the ability to maintain their own brand, with name and logo on all screen views. It gives trade exchange members the ability to manage their own accounts as they can post transactions, view online statements, check transaction history, and search local and global member directories.
Robert Schumacher, Bentley's president and COO, declared, "In our opinion, VirtualBarter is the best for our member exchanges. It's the most scaleable. We were extremely impressed with the current product, but the new version will put us at the forefront of the barter industry."
If you haven't read the current issue of BarterNews, get yourself a copy now—issue #61 has just been released! Orders are shipped the same day we receive them. (Click on Order Form )
Autumn Trade Fairs & Holiday Expo's....
October 25: San Diego BXI Fall Trade Fair will be held at Natural Reflections, 190 Wilshire Road, Oceanside (CA)...on Saturday 10 a.m. to 5 p.m.
(Send your "holiday fair/expo information" to: email@example.com)
Nineteen years ago, in issue #8 of BarterNews, we reported on an entrepreneurial California vintner who embraced barter to build his winery...we feel his thinking about barter's applicability is as relevant today as that of two decades ago.
Vintner Finds Answer In Barter For Building Business
Wine is not every man's drink in the U.S., as it is in Europe. One man trying to change the wine image is Napa Valley wine maker Hamilton Vose III. He advertises his slightly sweet White Zinfandel through a print ad that places a bottle of wine next to an elegant wine glass overflowing with...popcorn!
Mr. Vose's innovative thinking is not limited to his unusual advertising message. He's also creative in his marketing methods. He's an avid barterer! And well he should be, as the California wine industry is extremely competitive.
The six largest wineries account for 80% of the wine sold in the state. Such overwhelming dominance means that the 90 smaller wineries must battle hotly for business. Vose, through his bartering efforts, moves his wine while acquiring the necessities for building his business.
Our first encounter with the Voses was at the Southern California Business Exchange (BX) Faire. Hamilton and his beautiful wife, Lourdes, had journeyed over 500 miles to trade their wares.
We enjoyed our brief meeting with the Voses and found them, as well as their wine business, most fascinating. To learn more about Vose's wine trading techniques, as well as take a peek at the industry itself, a BarterNews representative traveled north to their 300-acre mountain vineyard estate, located in the world-famous wine region of Napa Valley.
The day chosen to interview Vose was cold and rainy, no day for a picnic. Driving up Mount Veeder through a patch of dense, towering trees one rounds a sharp bend and sees acres of orderly sown grapevines. A small wooden sign is nailed to a lone pine in this quiet, tranquil setting. It reads: "Pinot Chardonnay, Planted 1973 by H. Vose III."
After a brief tour of Vose's Redwood Ridge Ranch, we proceed to the wine tasting room where we can talk.
BarterNews: Hamilton, how did you get involved in the wine business?
Vose: I've been asked that question a hundred times! I grew up in California, went to school in Santa Barbara, so I was acquainted with the famous Napa Valley region and its reputation for producing fine wines.
After college and the service, I settled in Chicago. There I operated a commercial paper company, selling high-grade paper to printers and lithographers. We represented such mills as Mead, Hammermill, St. Regis, as well as becoming the largest distributor for Kimberly-Clark coated paper in the country.
My next endeavor was a warehouse business back there, which had 160,000 square-feet of space to rent out.
Although my businesses were successful, I wasn't completely satisfied. I'd always dreamed of being a farmer...working the land, so to speak. After a lot of thought and research, I settled on the Northern California area. The isolated mountain land was relatively inexpensive. I could afford to build a vineyard here and grow high quality grapes.
Superior grapes come from areas there they have to struggle a bit. My goal was to build and maintain one of the finest vineyards in the country.
When I achieved that goal and started selling my grapes to people who were making great wines, I became intrigued with the possibility of producing wine myself. Since I had already learned the vita-cultural aspects of the business, I decided to go into wine-making too.
To be continued
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