Is this revenue

Any non-Tax accounting topics go here.
#1
Posts:
98
Joined:
4-Oct-2022 8:36am
Location:
FLORIDA
I have a client who provides a subscription base model. The revenue for the subscription is recognized every month with no issues.

The subscription is a membership to purchase rare gold coins at the best spot price.

So client received a large deposit of 100k and has an outflow of 100k to a gold merchant.

Is the 100k revenue? or a liability to the company?

Note he makes no money on the Gold, no arbitrage is happening. He helps the client find good deals on gold coins.
 

#2
Posts:
3670
Joined:
21-Apr-2014 11:24am
Location:
North Carolina
So he makes money from the subscriptions and the gold purchase is basically a recharge? How quickly does the payment for the gold get turned over?
 

#3
Posts:
98
Joined:
4-Oct-2022 8:36am
Location:
FLORIDA
Same day, literally an in and an out on the bank statement.

Right now he is Claiming 100k revenue and 100k cogs, but i am doubtful if this is revenue
 

#4
eze  
Posts:
308
Joined:
8-May-2014 7:02pm
Location:
Grey Area, California
Is client taking title to the gold....if only momentarily? If not, sounds like he's just a broker....subscription would be revenue. Brokering purchase would not be revenue.
 


Return to General Accounting



Who is online

Users browsing this forum: No registered users and 9 guests