Club membership fee query

[silverfoxcc]

These figures are purely hypothetical, but i would like to know if there is a correct way of presenting them on the accounts each year

club has 120 members
The annual fee is 20.00
A life membership is 20 times the current annual membership (400.00)
20 members take advantage of the life membership

So for the first year there are subs paid in of 100x20 2000
plus 20 x 400 8000

the membership total does not change during the next 5 years and remains at 100 annual paying members and 20 life members

Am i correct in saying that the income received from subs in the first year should be shown as two seperate entries

1) subs ( 100 members) 2000
2) life subs (20 members 8000

How would thise be shown in year 2

The annual subs is no problem, but how would the residue? of the Life membership be shown?
if at all?

Hope that makes sense, i am not an accountant!!!!

Edited by silverfoxcc on Sunday 15th January 14:18

[TooLateForAName]

It wouldn't. Other than as an existing asset on the balance sheet. I cant see how it would be relevant to a P&L.

What are the accounts for? AS in who are they being prepared for? what purpose?

[Eric Mc]

If you were being a properly prudent accountant, you would apportion the Life Subs over the expected life of the members who pay the life sub. In other words, you would bring into the profit and loss account 1 year's worth of their sub until they have used up their full membership (i.e. they peg it).

However, the sums in this operation are pretty tiny so who cares?

As has been asked, who are these accounts being prepared for?

HMRC?
The Charity Commissioners?
The members?

If the members, only, then it is up to them to decide how they want the income accounted for. Because of the small size of the entity, I'd be inclined to bring all the income into the accounts when its actually received.