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      • Native Language:
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    #1

    sales swap

    Would you please explain the following in bold more easily? What does "sales swap" mean?

    The tech company perfected the art of financial sleight-of-hand. At the height of the Internet economy, I looked under the hood of more than one dot-com wonder only to discover that a big chunk of their reported income was in fact barter revenue---a sales swap between companies for advertising or other services that offered no real incremental value to earnings.

    Is this saying "one company's service and another company's service are swapped each other, they are booked as revenue on their balance sheet?" I don't understand the practice.

    Thank you.

  1. emsr2d2's Avatar
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    #2

    Re: sales swap

    It means that they have exchanged services without any payment being involved.

    For example, perhaps a computer company provides another company with a computer in exchange for the other company advertising the computer company in their literature.

    A photographer who wants to take good photographs of a model but doesn't have enough money to hire one, might advertise for a model and tell the model that instead of money, the photographer will give the model the photographs to use in her portfolio. Both parties involved benefit from the arrangement but no money changes hands.

    • Member Info
      • Native Language:
      • Korean
      • Home Country:
      • South Korea
      • Current Location:
      • South Korea

    • Join Date: Jun 2007
    • Posts: 1,271
    #3

    Re: sales swap

    I see.

    Thank you for the help.

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