We are in preschool franchising business. Recently we have signed a Business Alliance Agreement with an institution who will generate business prospects for us. In turn if there is any prospect finally takes our franchise, then a percentage of Franchise Fee will be shared with that institution. More over the institution will also be responsible to look after centre support activities of such franchise centre(s) which is/are converted from their reference/lead.
We have given non exclusive territory right to such institution and received amt of Rs. 50,000/-as Business Alliance Agreement Fee from such institution, which is non refundable for the tenure of 5 years.
My question is that how could we recognise such receipt of Rs. 50,000/- and reflect that transaction in our books of a/cs?
CAclubindia
