Independent and private schools typically have a variety of fees including; application fees, enrolment fees, tuition fees, late fees and additional fees for elective subjects, as well as contributions for building funds or associations. Fee structures can get more complex when discounts are provided depending on the number of children per family attending the school.
New accounting standards, AASB 15 Revenue from Contracts with Customers (AASB 15) and AASB 1058 Income of not-for-profit entities (AASB 1058), establish new recognition criteria that apply to schools recognising revenue related to school fees.
Not-for-profit entities, including schools, are required to adopt these new requirements for years beginning on or after 1 January 2019. With the transition date looming, it is time for not-for-profit entities to understand the new standards and determine how these will impact their revenue recognition policies.
The attached article highlights some of the potential implementation issues faced by schools when applying the new guidance to their fee structures.
For further clarity or guidance around these changes and what they mean for you, we encourage you to contact your local Crowe Horwath adviser for more information.