A two-way exchange of economic resources; a transfer of assets/ liabilities in exchange for equal value (or approximately equal value). An entity may receive assets or services against payment of compensation. Likewise, it may have a liability extinguished by paying equal value in exchange to the other party assuming it (to which it is transferred). Broadly speaking, a reciprocal transfer is an exchange (exchange transaction) between an entity and another entity or party that results in the entity’s acquiring assets or services or extinguishing liabilities by surrendering other economic resources (assets or services) or assuming other obligations.

A reciprocal transfer typically involves monetary assets/ liabilities. However, it may also involve non-monetary assets/ liabilities. A reciprocal transfer of a nonmonetary asset cannot be considered an exchange unless it is proven that risks and rewards of ownership (pertaining to the transferred asset) have substantially transferred by the transferor.