Clubs are in the dues business. They are the key to a private club’s success. Dues represent approximately 50 percent of the operating revenue of country clubs and approximately 40 percent of operating revenue for city clubs. When you factor in that no direct expenses are allocated to dues, 100 percent of every dues dollar goes to the bottom line. However, clubs were reluctant to raise dues for several years – at least not enough to adequately fund club operations. Boards were reluctant to address the issue because they did not want to deal with any potential controversy surrounding it. Instead, they chose to pass the problem to their successors. And while some clubs have rebounded nicely from the economic down turn, especially the “A” level exclusive clubs, a combination of pressures on clubs has made it more important than ever to address the issue now:
For many years debt issuance costs have been a bit tricky to present and display correctly on financial statements. As part of the Simplification Initiative, the FASB issued Accounting Standard Update 2015-03, revisiting the issue of properly accounting for debt issuance costs and specifying their new categorization on the balance sheet. The change is a big shift, moving the issuance costs from the asset side of the ledger where it was originally reported. Now, debt issuance costs need to be reflected in the balance sheet as a direct reduction against the related debt. However, the effect is the same at the end of the day in that the debt liability is reduced up front rather than as an asset balanced against a liability over time.