Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Membership fees of employee

Satvir Singh (Newly minted CA) (1733 Points)

25 May 2011

What should be the treatment of membership fees of golf club paid by company on behalf of employee, in cash. Should it be charged to P&L a/c under head "Membership fees" or what??

Reply
Follow
Share

7 Replies

Jag Bhushan Sharma (Faculty in a B-School) (633 Points)
Replied 25 May 2011

If that membership fee is only for one year, then it should be debited to P&L A/c as employee cost. But if this fee is for a number of years and the employee is under bond to stay with the company for a number of years, then partly it can be booked in this year and balance could be shown in balance sheet as a current asset.

Upgrade to CAclubindia Pro. Subscribe Now!

Satvir Singh (Newly minted CA) (1733 Points)
Replied 25 May 2011

thanks, sir.

it is for 6 months. while crediting cash account, which account should be debited?

Jag Bhushan Sharma (Faculty in a B-School) (633 Points)
Replied 25 May 2011

As mentioned earlier 'employee cost'.

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 25 May 2011

whether it is recoverable from employee?

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 25 May 2011

if it is not recoverable than earlier said by sharma sir's treatment will be done

Upgrade to CAclubindia Pro. Subscribe Now!

Satvir Singh (Newly minted CA) (1733 Points)
Replied 25 May 2011

thanks a lot................no, it is not recoverable.

Ashish Chhawchharia (Chief Manager Finance) (38 Points)
Replied 25 May 2011

If the entire membership fees relates to period prior to 31st March, i.e before date of closing of books of accounts, than the same be booked as expense under "Membership Fees" account, else the proportionate exp. up to 31st March to be booked in "Membership Fees" account and the prop amount after 31st March to be booked in "Prepaid expense" account.