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Business and Financial Policies and Procedures

13.5 Non-Monetary Exchanges

Policy Statement

Units must ensure that non-monetary exchange transactions are reported to University Accounting and Financial Reporting (UAFR) at the appropriate fair market value on a timely basis in compliance with the applicable contract requirements.

Reason for the Policy

To ensure accurate reporting for the University of Illinois System’s audited financial statements.

Applicability of the Policy

All units that engage in non-monetary exchange transactions.


A non-monetary exchange occurs when the University of Illinois System receives something of value from an external entity in exchange for providing something of value to the external entity in return, rather than paying for it with cash or a cash equivalent.

Non-monetary exchanges may occur independently or may occur as a secondary aspect within other types of transactions, such as:

  • Sponsorships
  • Gifts-in-kind
  • Reduced cost agreements
  • Trade agreements
  • No-funds agreements

Examples of transactions that are not non-monetary exchanges include:

  • Discounts offered by vendors for volume purchases or due to the fact that we are a qualifying educational institution. These types of discounts are considered a normal aspect of negotiating a monetary transaction, and the UI System is not giving up goods or services in exchange for the price reduction in these instances.
  • Trade-in of equipment to acquire new equipment.
  • Nominal premiums given to donors (such as a t-shirt or coffee mug) as a thank-you acknowledgment for the donation of a gift-in-kind.

Valuing a non-monetary exchange

Non-monetary exchange transactions are recorded at the estimated fair market value of the goods and/or services provided by the system. However, if that fair market value cannot be determined, then the non-monetary exchange transaction is recorded at the estimated fair market value of the goods/services received by the system.

See below for common examples of non-monetary exchange transactions and how these transactions would be valued for the system’s financial statements:

Example 1: A performance arts center enters into an agreement with a local television station to provide season tickets for the season’s upcoming shows (valued at $2,500) to the local television station in exchange for $2,500 worth of the local television station providing various television advertising spots throughout the year at no charge. In this example, the value of the non-monetary exchange would be $2,500 (which is the fair market value of the season tickets provided by the performance arts center and the value of the advertising provided). The related accounting entry in Banner would be a $2,500 debit to an advertising services expense account code and a $2,500 credit to a ticket sales revenue account code. A contract is required.

Example 2: A unit enters into an agreement with an external t-shirt vendor to provide advertising services throughout the year to the external t-shirt vendor in exchange for 600 staff t-shirts (valued at $3,000) at no charge. The unit in this example typically does not sell advertising services in this manner, so the value of these advertising services provided by the unit is unknown. So, since the value of what was provided by the unit is unknown, then the non-monetary exchange should be valued at the fair market value of the goods/services received by the unit, which would be $3,000 in this example. The related accounting entry in Banner would be a $3,000 debit to a wearing apparel supplies expense account code and a $3,000 credit to an advertising services revenue account code. A contract is required.

Reporting a Non-Monetary Exchange

Properly valued non-monetary exchange transactions must be reported to UAFR by completing and submitting a Report of Non-Monetary Exchanges transaction form. These non-monetary exchange transactions should be reported to UAFR within the same accounting period (i.e., the same month) in which the transaction occurred, and are typically recorded on an applicable self-supporting fund. UAFR will then review the submitted form and will record the applicable transaction in Banner on your behalf.

Forms Used in this Procedure

Report of Non-Monetary Exchanges

Related Policies and Procedures

19 Contracts

Additional Resources

Non-Monetary Exchange FAQs

Last Updated: September 2, 2021 | Approved: Senior Associate Vice President for Business and Finance | Effective: January 15, 2020

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