Fees collected and paid

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Md Raza (Querist)
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25 May 2017 Hi,

While preparing financial statement, I was confused regarding fees collected and paid, in receipt and payment I have shown fees received and paid, my query is fees revived and fully paid should be shown in income and expenditure or in balance sheet, please help

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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25 May 2017 Elaborate more 1.For what purpose u received fees. 2.From whom u received it 3.Date of receipt & payment

Md Raza

Md Raza (Querist)
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25 May 2017 It is fee collected in college from students

Md Raza

Md Raza (Querist)
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25 May 2017 It fee collected from student and remitted to government/ university

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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24 July 2024 When preparing financial statements for a college or educational institution, how you account for fees collected and paid depends on the nature of the fees and the accounting standards you follow. Here’s a general guideline:

### Fees Received from Students:
1. **Recognition in Income and Expenditure Account:**
- **Tuition Fees (Revenue):** Fees received from students for education services provided by the college are typically recognized as revenue in the Income and Expenditure Account (similar to an Income Statement in commercial accounting).
- These fees are considered earned when the services (education) are provided, not necessarily when they are received. So, if a student pays tuition fees for a semester or term, the college recognizes this revenue in the period in which the education services are provided, not necessarily when the payment is received.

2. **Treatment in Balance Sheet:**
- In the Balance Sheet (Statement of Financial Position), fees received in advance but not yet earned (i.e., for future terms or academic periods) are classified as Deferred Revenue or Unearned Income under Liabilities until the corresponding education services are provided.

### Fees Paid to Government/University:
1. **Recognition in Income and Expenditure Account:**
- **Examination Fees (Expense):** If the college collects fees from students and then remits these fees to government bodies or universities (e.g., examination fees, registration fees), these payments are typically recognized as expenses in the Income and Expenditure Account when they are incurred.

2. **Treatment in Balance Sheet:**
- These payments are reflected in the Balance Sheet as part of current liabilities until they are paid.

### Example Scenarios:
- **Scenario 1 (Fees Received and Earned):** A college receives tuition fees from students for the upcoming semester. The services (education) related to these fees will be provided over the semester. These fees will be recognized as revenue in the Income and Expenditure Account as the services (education) are provided.

- **Scenario 2 (Fees Collected and Remitted):** A college collects examination fees from students and subsequently pays these fees to a government authority. The collection from students is initially recorded as revenue in the Income and Expenditure Account. When the fees are remitted to the government, the corresponding expense is recognized in the same account.

### Conclusion:
- **Fees Received and Earned:** Recognized as revenue in the Income and Expenditure Account when earned (services provided).
- **Fees Collected and Remitted:** Recognized as revenue when collected and as an expense when remitted, both in the Income and Expenditure Account.

Ensure your accounting practices align with relevant accounting standards and guidelines applicable to educational institutions in your jurisdiction. If in doubt, consulting with a professional accountant or auditor familiar with educational institution accounting can provide further clarity tailored to your specific circumstances.

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