ACCOUNTING FOR BARTER IN REAL ESTATE.
Transactions variously described as trades, exchanges, or "deals" are very common in the real estate business. The difficulties which such transactions present for the accountant are due to a number of circumstances. In the first place, these dealings follow no rules. Each one is a law unto itself. They do not readily fit into any system of bookkeeping, no matter what preparations have been made to care for every possible contingency. Very often they involve immediately neither cash receipts nor disbursements. Sometimes they are not even evidenced by a formal agreement between the parties, although they always should be. Even when the agreement exists, it is often ignored in some details. Thus it is sometimes very difficult to find out what actually has happened. A common occurrence is the assumption of liabilities the precise amount of which is determinable only in the future, so that the original entry for the transaction must be tentative, either estimating the amount of the liability in order to obtain the cost of the property exchanged and hence the profit or loss on the transaction, or waiting until such time as the liability is determined before attempting a reckoning of the final results. One of the chief difficulties is that the agreements cannot ordinarily be taken at face value for accounting purposes, even if to the letter they are carried out. This article presents several cases which highlight these issues.
- DOI
- 10.2308/tar-8594308
- Volume
- 2 (4)
- Pages
- 327-338
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref