This document discusses corporate trade (also known as barter) as a tool for companies to address excess inventory and mitigate the impacts of poor forecasting. It provides the following key points: - Corporate trade allows companies to sell excess or underperforming assets to corporate trade companies in exchange for trade credits, which can then be used to purchase other goods and services, creating savings. - The accounting guidance considers trade credits received in exchange for assets as a prepaid expense on the company's balance sheet. The asset is reclassified at its fair value up to its carrying value. - An example transaction is described where a company sells an underperforming asset with a book value of $1 million but market value

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EXHIBIT 3
Financial Impact of Trade (in Thousands)
At Contract Cumulative
Signing Date Year 1 Year 2 Year 3 Totals
Cash Outlay — $1,000 $1,000 $1,000 $3,000
Prepaid Asset — $133 $133 $133 $400
Amortization Expense
Balance Sheet $400 $267 $134 — —
Prepaid Account
EXHIBIT 1
Financial Impact of Trade (in Thousands)
At Contract Cumulative
Signing Date Year 1 Year 2 Year 3 Totals
Cash Outlay — $1,000 $1,000 $1,000 $3,000
Prepaid Asset — $333 $333 $333 $1,000
AmortizationExpense
Balance Sheet $1,000 $667 $334 — —
Prepaid Account
EXHIBIT 2
Economic Benefits of the Transaction
Cost of goods and other services, at benchmark prices, to be acquired $ 4,000,000
Consideration given up for goods and services:
Cash component $ 3,000,000
Fair market value of inventory 400,000
Total consideration 3,400,000
Value and cash savings created $ 600,000