A membership pass to the YMCA (a private not-for-profit organization)includes unlimited rights to all facilities and a health magazine subscription. Non-members do not possess these rights. How must the YMCA account for membership dues?

Question

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The membership pass to the YMCA is an exchange transaction as it involves the transfer of rights to use facilities and receive the health magazine subscription. Therefore, the YMCA should report membership dues on a pro-rata basis determined by the length of individual membership, as it recognizes revenue when it provides the services to the members. This method is consistent with the revenue recognition principle under Generally Accepted Accounting Principles (GAAP).

A Membership Pass to the YMCA (A Private Not-For-Profit Organization)includes