Recognition of revenue in barter transactions - advertising - Accounts

Dear All,

I need an opinion on the accounting treatement as per Indian accounting standard or Ind As.

Scenario 1

Company XYZ ltd (listed) owns an Television channel network. It gives an advertisement in print media with company ABC . Instead of paying money to the print media company (ABC); XYZ Ltd allows the print media company to advertise on its television channel in exchange of services provided to XYZ Ltd.

How will XYZ company and the print media company ABC Ltd recognise revenue and expense in this case?

Scenario 2

PMR consultants have provided service to XYZ limited (owns an television channel)

Instead of receiving money for services provided, XYZ limited allows PMR consultants to advertise on its channel in full consideration of the service provided by PMR.

At what value will the transactions be recorded in both the company books?

Scenario 1:

Since the products are different and carry different risk and returns (under AS 9 or IAS 18), both companies are required to book revenue at the fair value of consideration. This practice was popular earlier within companies to do promotional activities of this sort, hence avoid taxes on services by non-recognition of revenue by either of the party. However, it was recognised by the IASB and clarity given that any batret transaction is considered within the scope of Revenue provided that the items under the exchange are different.

Scenario 2:

Similar to above instance. The TV company and consultant are required to book revenue at its fair value (for example, the TV company shall book revenu at the time slot rate as applicable for the telecast of advertisement).

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Thanks

Amit

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