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Business and Financial Policies and Procedures

Methods of Valuing of Non-Monetary Exchanges

Non-monetary exchanges can occur in various transactions. They are recorded at the estimated fair market value of the goods and/or services provided by the University. If fair market value cannot be determined, the exchange is recorded at the estimated fair market value of the goods and/or services received by the University.

Non-monetary exchanges may have other financial ramifications, such as gift and tax reporting consequences. If you have questions, contact University Accounting and Financial Reporting (UAFR) at uas@uillinois.edu.

Trade Agreement

A campus athletic unit allows radio stations across the state to carry coverage of its live sporting events (estimated fair market value = $1,800) in exchange for radio spots to advertise ticket sales (estimated fair market value = $2,500).

Value to report = $1,800 (fair market value of services provided by the University)

Cost Reduction

A unit is charged a reduced rate of $250 per day for use of a local hotel's conference room (normally rented at $500 per day) for a University-sponsored event in exchange for providing hotel advertising on brochures and flyers publicizing the event (estimated fair market value of $200).

Value to report = $200 (fair market value of goods provided by the University)

Sponsorship Agreement

A University's performing arts center enters into a agreement with a local hotel. The agreement provides for acknowledgement of the hotel in the center's events program, in return for a cash payment. The agreement also provides the hotel with two season tickets (estimated fair market value = $1,600). In exchange, the hotel agrees to provide accommodations for the artist(s) performing the shows (estimated fair market value = $1,000).

Value to report = $1,600 (fair market value of goods provided by the University)

Gift-in-Kind

A local department store agrees to donate $10,000 worth of paper supplies to one of the Housing Department's dormitories. They indicate they will add another $3,000 worth of paper supplies if the store can use the dormitory cafeteria space once a month for staff meetings during the next year. The fair market value for use of the cafeteria space for this purpose cannot be determined.

Value to report = $3,000 (fair market value of goods provided by the University)

Last Updated: June 2, 2014 | Approved: Senior Associate Vice President for Business and Finance | Effective: November 2009

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