I would like to have the views of professionals regarding how the revene is recognised in the club membership and other similar industry. For example a 10 years membership of club is offerred to the customer at Rs.500000. Out of this Rs.100000 is payable in advance and balance Rs.400000 is payable in 24 emis. On final payment the members would be entitled to use the services of club with the nominal payment of annual maintenance fees. My question is how the revenue is recognised in such type of setup and what accounting entry is passed at different stages.
Menu
Revenue Recognition in a Club / Member busines
Replies (2)
Dear Saiyum
The revenue will be recogized as and when amount for membership fees becomes due as the same is receiveble as per the terms of contract
Following will be the accounting entry as per my opinion: (answer is according to your example)
when amount becomes receivable
Party A/c Dr (For booking the income)
to Membership Fees A/c
Bank A/c Dr. (when amount is received)
to Party A/c
Above entry will be passed at all stages ie when amount of Rs 1 lac is received and at the end of each of the 24 months....
Thanks Anvesh
Will It be wrong if following entry is passed
At the time of Admission of Members
Party A/c Debit Rs.500000
To Member ship Income Rs.500000
At the time of receipt of Down Payment
Bank / CAsh Dr. Rs.100000
To Party A/c Rs. 100000
At time of receipt of each EMI
Bank / CAsh Dr.
To Party A/c
Recent Threads
- TDS on purchase of property more than 50 lakhs
- Withdrawal from post NSS
- Section 10(11) or 10(12) of exempted income
- New income tax act
- Duplication of Interest on SCSS deposits in postof
- Declaration of foreign investment
- Parent buying property for major child
- LIC maturity amount filing missed
- Advice on income tax
- E filing thr net banking for AY2025-26
Related Threads
CAclubindia
