Gym vs Me – Real Case
I paid ₹10,000 upfront to the gym, and based on my accounting records:
Dr. Prepaid Expenses
Cr. Bank
That payment is recorded as a prepaid expense, an asset in my books.
Now, I'm no longer attending the gym, yet they've informed me they're continuing to charge me. Here's why I believe their stance doesn't hold:
1. Prepaid Expenses are Assets – I've already paid. I’m not obliged to anyone unless a performance obligation is outstanding. My liability ceases the moment the service isn’t delivered or used.
2. Asset Definition Is Met – The prepaid amount is a resource I control. If they fail to deliver services, I retain the right to claim value. Their contract terms must align with how my books recognize the transaction—if they don't, that's on them.
The gym’s customer agreement appears fundamentally flawed. Their contract doesn't reflect valid performance criteria or obligation structures in line with financial recognition principles.
Conclusion
I'm confident this case tips in my favor. Their argument doesn't stand against accounting standards or the basic legal principle of fair exchange. Be careful, it's a tricky question.
![Dr. MPS RAMANI Ph.D.[Tech.]](/img/avatars/my_avatars/84227.jpg)
