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50/50 event

  • 26-09-2013 10:25pm
    #1
    TheScriptFan
    Registered Users, Registered Users 2 Posts: 129 ✭✭


    Hello - quick accounting question...

    I am hosting an event which proceeds will be split 50/50 with me and another company. Our company is going to take in all the funds for ease and then pay over the 50% due to the other organisation.
    My question is:
    Do I show 100% as revenue and then the 50% passed to the organisation as an expense?
    Or do I just show the 50% nett share I am receiving as revenue and no expense.

    Would prefer to do the latter but it doesn't quite reconcile accounting wise so wanted to ask others opinion!


Comments

  • #2
    ASOT2012
    Registered Users, Registered Users 2 Posts: 94 ✭✭ASOT2012


    My thinking would be this. For example if total Revenue was 100 Euro.

    CR Revenue 50
    DR Bank 100
    Cr payable (other company) 50

    Then put your own share of expenses that you will be paying through the P&L. If you incurred expenses of 40.
    DR P&L 40
    CR Bank/Payable 40


  • #3
    imthegaffer!
    Registered Users, Registered Users 2 Posts: 16 ✭imthegaffer!


    TheScriptFan wrote: »
    Hello - quick accounting question...

    I am hosting an event which proceeds will be split 50/50 with me and another company. Our company is going to take in all the funds for ease and then pay over the 50% due to the other organisation.
    My question is:
    Do I show 100% as revenue and then the 50% passed to the organisation as an expense?
    Or do I just show the 50% nett share I am receiving as revenue and no expense.

    Would prefer to do the latter but it doesn't quite reconcile accounting wise so wanted to ask others opinion!


    It has to be the latter.

    Think about the first way. Say the total take for the event is €100. If you record the revenue as 100% of the take and then pass 50% of it to the other company, they'll record that 50% as revenue and in essence €150 will be recorded as revenue by both companies when the take was only ever €100.

    Also recording the total take as revenue and including a cost (being the payment to the other operator) isn't reflective of the transaction that will take place, where as your second option is.

    *Just seen ASOT2012 entries there and I'd agree with them as how to post them from an accounting point of view


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