The company I work for runs events.
They book performers in advance, agree a contract and often pay a deposit.
The event may be months in the future.
My understanding is we should be holding these deposits on the balance sheet until the month of the event when they can be expensed, is this correct?
We would also do the same with income received for the event.
How about the balance due? Should we accrue these costs to the balance sheet - i.e Dr fees paid in advance (BS), Cr Accruals (BS) until the time of the event when the actual payment will be made and the accrual released.
We would also be signing a contract with a production company who will provide equipment and staff, once the contract is agreed will this also need to be dealt with in a similar way Dr paid in adv (BS), Cr Accruals (BS)?
Many thanks for your time.