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.g., the barter of a commodity for a commercial aircraft).
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
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.
At Point of Counterpurchase
. If revenue is not recognizable at the point of the original sale for the parent corporation, does the completing of the purchase requirement fulfill the revenue recognition criteria?
The arrangements take two general forms - bartering and linked transactions, the latter being made up of counterpurchases
, buybacks, and offsets.
are similar to offset arrangements.
* providing countertrade, offsets, or counterpurchases
to secure large purchases.