Rescinded [2017-04-01] - Policy on Accounting for Non-Monetary Transactions

Establishes the requirements for the charging of non-monetary transactions to an appropriation.
Date modified: 1994-10-01

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Parliament has the constitutional right to levy taxes and authorize government expenditures. This means that all expenditures must be charged to appropriations that have been approved by Parliament; all revenues must be deposited in the Consolidated Revenue Fund; and an accurate and complete accounting for expenditures and revenues must be made to Parliament. The policy that is described in this chapter requires non-monetary transactions (bartering) to be charged to an appropriation in the same manner as monetary transactions, thereby bringing non-monetary transactions within the parliamentary control framework.

Managers are responsible for carrying out their programs with due regard for economy, efficiency and effectiveness. The policy result in the same decision-making framework being applied to non-monetary transactions as to monetary transactions. A non-monetary transaction that brings greater benefits than its monetary equivalent will be worth pursuing. On the other hand, there will be a disincentive to pursue a non-monetary transaction that is not as good as its monetary equivalent.

Accounting illustrations are included in Receiver General directive 1994-3.

Appendix A contains relevant definitions.

Policy Objective

To enhance parliamentary control and to improve accountability for, and disclosure of, federal government non-monetary transactions.

Policy Statement

It is government policy that non-monetary (bartering) transactions be recorded in the accounts of Canada as if they were monetary transactions.


This policy applies to all organizations considered to be departments within the meaning of Section 2 of the Financial Administration Act (FAA).

Policy Requirements

Departments must establish procedures to ensure that:

  • non-monetary transactions which take place between the Government of Canada and an outside party, such as a Crown corporation or the private sector, are charged to their appropriation and are accounted for in the accounts of Canada as if they were monetary transactions when their fair value exceeds one hundred thousand dollars ($100,000);
  • non-monetary transactions within the Government of Canada which take place between programs are accounted for in the accounts of Canada in a manner consistent with the interdepartmental charging policy when their fair value exceeds one hundred thousand dollars ($100,000); and
  • a clear audit trail exists for all non-monetary transactions, regardless of whether they are subject to the accounting requirements of this policy.

For purposes of this policy, the one hundred thousand dollar ($100,000) limit mentioned above applies to: single transactions; the total fair value of a group of related transactions; and the present value of a series of related transactions which occur over a number of years.


The correct and prompt recording of non-monetary transactions should be verified by the departmental internal audit group on a regular basis. Audits should also examine the propriety of such transactions.


This policy is issued under the authority of the Financial Administration Act, Section 7(1)(c).


This chapter cancels chapter 6-14 of the "Financial Management" volume dated August 1, 1993.


Enquiries concerning this policy should be directed to departmental headquarters. For an interpretation of this policy, departmental headquarters should contact:

Comptroller Sector
Program Branch
Treasury Board Secretariat
Ottawa, Ontario
K1A 0R5

Telephone: (613) 957-7233
Facsimile: (613) 952-8772

Appendix A - Definitions

1. non-monetary transactions

The term "barter" is often used to describe this type of transaction. Non-monetary transactions are exchanges of non-monetary assets, liabilities or services for other non-monetary assets, liabilities or services. A non-monetary transaction can also occur as part of a larger transaction containing both monetary and non-monetary considerations. Examples of assets and liabilities that might form part of a non-monetary transaction include, but are not limited to: tangible assets such as real property, machinery and inventory; intangible assets such as rights or privileges; and liabilities such as the obligation to provide future services.

Cost-shared projects, where a government program cooperates with another party toward a common goal, are not considered to be non-monetary transactions. Neither are trade-ins, because typically the value received for the trade-in is a small percentage of the total value of the transaction.

2. fair value

This is an amount that would be agreed upon by informed parties dealing at arm's length in an open market.

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