Counterpurchase

Counterpurchase

Exchange of goods between two parties under two distinct contracts expressed in monetary terms.

Counterpurchase

An agreement between two persons or companies to buy goods or services from each other, usually at different times. For example, Company A may buy goods from Company B in March, and then sell different goods to Company B in April. Counterpurchases are made for the mutual benefit of both companies.

counterpurchase

see COUNTERTRADE.
Mentioned in ?
References in periodicals archive ?
The four most common forms of hard currency generation are barter, buyback, counterpurchase and offset.
Counterpurchase is the most common form of countertrade hard currency generation.
Meaning 1: A category including various reciprocal or compensatory trade arrangements including barter, counterpurchase, and debt swap, through which value exchanges are used to help the sale of goods or services in situations where the sale otherwise would not have taken place (e.
Caterpillar's trading entity, The Caterpillar World Trading Company, has as its main function to finance exports of CAT equipment through counterpurchase of minerals, agricultural commodities and raw materials.
There are four major types of countertrade: barter, offsets, counterpurchase and buybacks.
Recent CT literature has focused the least analytical attention on perhaps the most important form, counterpurchase (CP) (Hoffmann, 1989).
Modern versions of barter include countertrade, counterpurchase, compensation, import entitlement programs, offsets, clearing arrangements, switch trading, etc.
Forms of countertrade may be grouped into five basic types: simple barter, clearing-account arrangements, counterpurchase arrangements, buybacks or industrial compensation arrangements, and offsets.
Under a counterpurchase arrangement, two separate contracts linking exports and imports are negotiated between two parties.
Although the preceding discussion suggests that revenue recognition for the parent corporation man, not occur until the resale of the counterpurchase goods, transactions must be recorded a each exchange that led to the final sale For the subsidiary (assuming a separate entity), the countertrade transactions are a series of "business as usual" entries The subsidiary would recognize revenue at the point of sale for the reasons state earlier.
The arrangements take two general forms - bartering and linked transactions, the latter being made up of counterpurchases, buybacks, and offsets.
providing countertrade, offsets, or counterpurchases to secure large purchases.