I have a client who sells advertising space in his magazine, he sells sometimes 6 months at a time at a reduced rate for taking the full 6 months, he wants his sales recorded in the month that they appear in his magazine and not when he actually makes the sale, is it ok to do this and just record the payment as payment on account and raise invoice for each month.
record as a prepayment (asset) and release in equal chunks as actual revenue during the months that the advertisments are published.
Most software can be set up to automate the transfers over the period so just a matter of writing the prepayment with auto releases setup for x months.
kind regards,
Shaun.
p.s. what the client is asking for is the only way that it should be done in order to adhere to the requirements of IAS18 as revenue should always be recognised in relation to the item to which it relates which in this instance is the payment of advertising for a given month.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
