accounting for life membership fees

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(Querist)


16 July 2009

plz advice me on accounting for lifemembership fees received by trust for publication published by that trust.
some times trust received annual subscription also.

how can i recognised income of that trust


Member (Account Deleted) (Expert)


18 July 2009

If Annual subscription - treat as prepaid expenses as in B/s and t/f the periodically segregate amount in P & L A/c, like Annual subs fees is 120000 for period May'09 to May'10 so in that case 120000/12 = 10000, but you should be t/f in P & L a/c 10000 x 11= 1,10,000 in P&L and 10000 will be shows in B/s as under prepaid expenses and if life time fees thn treat as capital expenses and if amount is less than 10000, treat as revenue.



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