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Accounting for income from Gym
Hi....Plz let me know can we change the accounting policy of a Gym from accrual to receipt basis claiming that the membership fee received are not refunded to the members later & hence it is the income of current year eventhough the membership is for more than 1 year.
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If the yearly income over expenditure is above Rs 1,20,000/- , it is compulsory for organisation to maintain accounts on mercantile basis not on cash basis.
So, the Accounting Policy for gym is must be on mercantile basis.
The income which is part of Membership fees must be treated as revenue and must not be capitalised.....
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