Question ID :
40611
Treatment of Life Membership Fees
A club received life membership fee. Should the amount be capitalized or taken to income? If income, can it be spread over number of years as decided by the management? Please share if there are any expert opinion or case studies. Thanks.
Posted by
balasubramanian
on
Mar 18, 2020
Filed Under
AUDIT
Answer ID :
80479
Life membership fees should be credited to separate fund (which is shown under liability) and fair proportion of it ( Depend upon each year membership fee ) should be credited as Income in Income & Expenditure Account each year.
Posted by
CA. SATISH CHAND GARG on
Apr 10, 2020
Answer ID :
80483
The moment you call it as a Life Membership Fee, it has to be capitalised, i.e, adding Capital Fund of the Club. Also, you need to declare it as an Accounting Policy. If you wish, you may transfer part of such fees to Income Statement on year to year basis. In such a scenario, you need mention/modify the same in Accounting Policy
Posted by
Rupakula Rajasekhar on
Apr 16, 2020