Buff It Up, a Privately Held Corporation Using ASPE, Successfully

question 57

Essay

Buff it Up, a privately held corporation using ASPE, successfully operates two high-end fitness centres in the same town. Members pay a $150 non-refundable initiation fee, and then a one-year membership for unlimited access to the facilities costs an additional $900. They have 3,200 active members. Memberships are required to be paid in full, in three equal monthly instalments over the first 3 months of a membership year. Partial refunds of the annual fees are only given if a member moves more than 50 kilometres away. In addition to the facilities, there is a juice bar that sells fruit smoothies and healthy snacks. Members can sign for their purchases at the juice bar and then they are billed at the end of the month.
Instructions
Discuss when all revenues should be recognized at Buff it Up. Support your discussion with reference to the specific revenue recognition criteria.

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Definitions:

International Marketplace

A global economic environment that enables companies to buy and sell goods and services across national borders, subject to regulations and policies of the involved countries.