Question
My company is going to be accepting stock in private companies in exchange for our company's services.?
What is the GAAP accounting for that type of transaction? Please, no lectures that we should not do it - it is part of our business model.
2 years ago - 1 answers
Best Answer
Chosen by Asker
If you recognize the stock at current value and put it on the books as acquired at t hat price you wwill have to declare the equivalent amount of revenue and when you sell the stock the purchase price would be th eprice you recognized it on the books for. If you do not recognize it now and basically give it zero purchase price then you'll have to declare its selling price as the full profit when you sell it and today claim no revenue for its acquisition. The IRS would be happier if you used the first scenario. Good Luck
by ynot
2 years ago
Asker's Rating: 