Questions concerning this policy chapter should be directed to:

• Veterans Health Administration
• Veterans Benefits Administration
• National Cemetery Administration
• Debt Management Center
• Financial Services Center
• Construction and Facilities Management
• All others

0801 Overview

This chapter establishes Department of Veterans Affairs’ (VA) financial policies for bartering transactions. Title 38 U.S.C. §§ 2412, 8111, and 8122 authorize VA entry into bartering agreements.

Key points covered in this chapter:

• Only a warranted Contracting Officer may commit VA to a bartering agreement; and
• Per Statement of Federal Financial Accounting Standards (SFFAS) 3, barter transactions should be recorded when goods or services are exchanged, not when agreements are established.

0802 Revisions

See changelog.

0803 Definitions

Bartering – The exchange of assets/goods (other than cash) or services for other non-monetary assets/goods or services. The exchange is for similar or dissimilar assets/goods or services.

Fair Market Value (FMV) – An estimated value, based on a comparison with identical or similar past, actual, or expected assets/goods or services, of what a willing buyer would pay a willing seller for assets/goods or services.

Monetary Assets and Liabilities – Assets and liabilities whose value is measured and stated in cash.

Non-monetary Assets and Liabilities – Generally, non-monetary assets include fixed assets such as property, plant and equipment as well as intangible items such as goodwill. Non-monetary liabilities include those obligations that are not payable in cash, or items that will adjust an expense.

Property, Plant, and Equipment (PP&E) – Tangible assets that:

• Have an estimated useful life of two or more years;
• Are not intended for sale in the ordinary course of business; and
• Are intended to be used or kept available for use by the entity.

0804 Roles and Responsibilities

Under Secretaries, Assistant Secretaries and Other Key Officials are responsible for ensuring compliance with the policies outlined in this chapter.

Contracting Officers are responsible for committing VA to a bartering agreement.

Facility Directors are responsible for ensuring that bartering transactions comply with this chapter’s guidance.

VA Fiscal Officers are responsible for reviewing bartering receivable balances on a monthly basis in order to identify and act upon delinquent bartering receivables.

0805 Policies

080501 General Policies

1. 38 U.S.C. statutes permit VA to:
   • Enter into bartering agreements and contracts with the Department of Defense (DOD) under 38 U.S.C. § 8111 for the mutual use or exchange of hospital and domiciliary facilities, as well as supplies, equipment, material, and other resources necessary to properly operate such facilities.
   • Lease land or buildings, or parts or parcels thereof, for a term not to exceed three years. When such leases are to public or non-profit organizations, they may be in exchange for maintenance, protection, or restoration by the lessee of the property leased, as part or all of the consideration for the lease, under 38 U.S.C. § 8122.
   • Lease any undeveloped land and unused or underutilized buildings, or parts or parcels thereof, belonging to the United States and held by National Cemetery Administration for a term not to exceed 10 years. When such leases are to public or non-profit organizations they may be in exchange for maintenance, protection, or restoration of the property leased by the lessee as part or all of the consideration for the lease, under 38 U.S.C. § 2412.
2. Bartered lease transactions cannot result in the transfer of ownership of fixed assets, nor require the capitalization of fixed assets by the lessee.
3. VA will enter into an authorized agreement with other entities to barter assets/goods or services based upon a memorandum of understanding or other appropriate document, in accordance with Federal Acquisition Regulation (FAR).
4. Only contracting officers will sign bartering agreements on behalf of the United States in accordance with FAR § 4.101.
5. In accordance with FAR § 52.233-1, contracting officers will include dispute resolution procedures in all bartering agreements in order to protect the agency’s interest from loss in the event of non-compliance with the agreement.
6. VA has no statutory authority and therefore cannot enter into a bartering agreement between VA appropriations, such as between the medical services appropriation and the research appropriation.
7. In accordance with SFFAS 3, VA will record accounting entries for bartering transactions in VA’s accounting system when the actual exchange occurs (i.e., when the assets/goods or services are provided by either side), not when the contract, agreement, or MOU is signed.
8. VA will comply with interagency agreement quarterly reporting requirement in Volume I, Chapter 11, Intragovernmental Transactions, for all bartering agreements with other Federal entities.

080502 Valuation of Assets, Goods, or Services for Barter

1. VA will determine the value for bartering transactions based on the FMV of the assets/goods or services involved.
2. VA will establish the FMV of non-monetary assets/goods or services by using these options in descending order to the extent each applies when value is not established at the point in time the asset is transferred to VA:
   • The estimated realizable value in cash transactions of similar assets/goods or services;
   • Quoted market prices;
   • Independent appraisals;
   • Estimated FMVs of assets, goods or services received in exchange (i.e., VA book value of VA items offered in exchange); or
   • Other available evidence.

080503 Asset and Liability Transactions

1. VA will generally retain ownership of its bartering assets/goods, until assets/goods are received in exchange. However, when bartering transactions are not completed in a single exchange event an accounts receivable or accounts payable may be created. Specifically:
   1. VA will record a bartering receivable when VA has provided assets/goods or services without the immediate reciprocal exchange. The future receipt shall be recognized as an asset to be decreased as goods or services are provided.
   2. VA will record a bartering liability when it receives more assets/goods or services than it simultaneously provides. If VA receives assets/goods or services but does not provide the reciprocal bartered assets/goods or services, then both the asset received, and corresponding liability, shall continue to be recognized and accounted for accordingly.
2. VA will write off the bartering receivable, establish an accounts receivable, and send a bill of collection to the bartering partner when a bartering receivable becomes overdue per the agreement or remains unfulfilled one calendar year following the agreement date.
3. VA will not make a bartering liability disbursement without receiving a bill of collection from its bartering partner.
4. VA will eliminate a bartering liability when it has fulfilled its obligation to the bartering partner based on the agreement.
5. VA will reclassify a bartering liability to accounts payable and reduce the budgetary authority of a bartering liability when it becomes overdue or exceeds one calendar year from the agreement date.
6. Before a bartering receivable or payable is recorded or liquidated, proof of delivery and acceptance is required (e.g., a VA receiving report or Department of Defense Form (DD) 250, Material Inspection and Receiving Report).
7. Refer to Volume V, Chapter 9, General Property, Plant and Equipment, regarding capitalization requirements where the bartered value of an asset meets VA’s capitalization threshold for tangible assets which have an estimated useful life of two or more years, are not intended for sale in the ordinary course of operations and are intended to be used or available for use.

080505 Gains, Losses, and Disclosure

1. VA will record liabilities for services to be provided in the future at the actual cost expected to be incurred to provide these services. This may result in a loss or gain against the original provision as the barter agreement is satisfied.
2. When gains or losses arise, they will be recognized in accordance with SFFAS 7 coverage of exchange transactions.
3. VA will not augment appropriations by receiving assets/goods or services without providing reciprocal value to the bartering partner.
4. VA will recognize and record the budgetary effect of bartering transactions when satisfying an expired agreement via a monetary exchange.
5. When VA receives funds as part of the consideration in a barter exchange, VA must anticipate reimbursable activity and request apportionment of income on an SF 132, Apportionment and Reapportionment Schedule, in accordance with Office of Management and Budget (OMB) Circular A-11.
6. VA will disclose in published financial statements the basis of accounting for the assets exchanged via bartering agreements, and the respective gains or losses recognized on significant transfers when applicable. Gain or loss disclosure will be in accordance with OMB Circular A-136 direction to SFFAS 7.

0806 Authorities and References

• United States Code (U.S.C.)
  • 38 U.S.C. § 2412, Lease of land and buildings
  • 38 U.S.C. § 8111, Sharing of Department of Veterans Affairs and Department of Defense health care resources
  • 38 U.S.C. § 8122, Authority to procure and dispose of property and to negotiate for common services
• FAR § 4.101 – Contracting officer’s signature
• FAR § 52.233-1 – Disputes
• FASAB Handbooks by Chapter
  • SFFAS 3 – Accounting for Inventory and Related Property
  • SFFAS 7 – Accounting for Revenue and Other Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting
• OMB Circulars
  • A-11, Preparation, Execution and Submission of the Budget
  • A-136, Financial Reporting Requirements
• VA Financial Policy
  • Volume I, Chapter 11, Intragovernmental Transactions
  • Volume V, Chapter 9, General Property, Plant and Equipment

0807 Rescissions

This chapter rescinds VA Financial Policy Volume II Chapter 8, Bartering, approved September 2022.

0808 Policy Approval

This policy was approved by the VA Chief Financial Officers’ Council on August 10, 2023.

Appendix A: Prior Policy Revisions

See changelog.