Determine at the end of a month, how many games for which you have collected the fees but have yet to provide your customers. We suggest you simply allocate your current season revenues by month based on the number of weeks in each month.
For example, if your Fall Season (September to October) is 8 weeks, and you collect $80,000 for the season, count the number of weeks in each month and recognize the pro-rata amount of revenue in each month. In this example, let’s assume you play 3 weeks in September and 5 in October. At the end of September, you would “owe” your customers 5 games. So, your Deferred Team Revenue account (a liability on your balance sheet) would need to have a balance of 5/8*$80,000 or $50,000. Your journal entry as of September 30th would be:
On October 1st, you want to reverse this journal entry, as you will be making a new one at the end of the month based on a new calculation. The reversal is as follows:
Often it is the case where you have collected money for a future season AND have a game or two remaining in the current season. We suggest you make an entry for each season, so it is clear and simple what each entry is trying to accomplish. The first would be the same as in the above example. The second would be the same entry, but for 100% of the future season fees already collected. To get this amount, simply run the Team AR Report for this season, but limit the report to only show transactions that have taken place as of the end of the month.