Create E Signature Barter Agreement Template For Free - Barter Template

A barter agreement is a legal contract that outlines the terms of trade between parties. This could be a trade of goods, services, products, or similar. Barter agreements are often used in place of exchanging cash or monetary payments. This agreement may also be called an "exchange of services" agreement.

A barter agreement outlines a trade of goods or services without the use of money. This type of arrangement is common between two (2) parties that are repeatedly transacting business with each other.

Since bartering is considered legal trading in the U.S., the Internal Revenue Service (IRS) treats goods and services gained as taxable income. So, the receivers of bartering income may be required to make estimated tax payments.

The terms of this barter agreement template ensure that each party agrees to value what they are offering fairly, and each party shall adjust their respective offer until the final exchange is fair and equal. Each party will use the fair market value of the product being offered to determine the product's cost.

Recording Barter Revenue In a standard journal entry, a barter exchange account is treated as an asset account, and the bartering revenues are treated as income items. In the example given above, the barter exchange account would be debited $100 and barter revenues would be credited $100.

A typical barter agreement template includes the following: Effective agreement date. Full and legal names of both parties. Details surrounding the goods or services involved in the barter agreement. Date or time frame and the location of the exchange.

Key Takeaways Bartering is the exchange of goods and services between two or more parties without the use of money. It is the oldest form of commerce. Individuals and companies barter goods and services between each other based on equivalent estimates of prices and goods.