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Admission form fees

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This query is : Resolved

Mayuri Nikunj Variava (Querist)
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28 December 2013 Dear Sir,
I m working in school as an auditor & accountant. School is running by trust.
I want to ask you that income of admission form fees of next financial year treated as income for which year. Income for current financial year or advance admission form fees(current liab.) in current year and than admission fees (indirect income) in next financial year.Please help me out.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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28 December 2013 should depend on the accounting principles followed by the organization.

If you are following cash accounting, the income shall be recognized in the year it is received. If you are following accrual basis, then advance received should be treated as current liability (as you rightly said) and treated as income in the next year.

However, with respect to receipt from admission forms, I believe you should for the same in the current year itself because:

1. The receipt from admission is generally not refundable or adjustable.

2. It has no relation to the classes run by the school in next year.

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