On 12/21/2017 4:03 PM, Aaron Laws wrote:
On Thu, Dec 21, 2017 at 9:44 AM, Mike or Penny Novack
<stepbystepf...@dialup4less.com
<mailto:stepbystepf...@dialup4less.com>> wrote:
My question: can you say more about using a liability (rather than
asset subaccounts) for restricted funds? Perhaps a link or two, or
(ideally) a reference to some gaap? That would be excellent!
Thanks for your continued enrichment of the public at large through
the gnucash-user mailing list. You are a tremendous resource.
Have you ever looked at the financial statement of a largish 501(c)3?
<< so a formal, audited financial statement >>
If so, did you not see (in the balance sheet portion of the report) the
liability for "donor restricted funds" (and possibly other sorts of
restrictions)
The idea is that the money was received into the regular banks accounts
but sort of not there/available because a corresponding liability. If
and when money has been expended for a reason which would qualify for
the use of those funds an adjustment transaction is made for the amount
no longer restricted. Not necessarily with each expenditure. Possibly
only quarterly (for the total of qualifying expenses that quarter) but
decisions like THAT depend on volume.
Michael
PS: I am NOT an accountant qualified to be giving advice. I simply am
doing books, preparing financial statements, a doing the filings for
some non-profits.
PSS: Yes, I have also used the children of an asset account
(partitioning a bank account). But that was only with INFORMAL
restrictions that the organization was not required to respect if
circumstances changed. Thus in this "organ fund" example, you might
choose to do that IF (for example) it was decided not to have an organ,
the church could keep that money and use it for something else -- or
would they have to ask the individual donors whether in that case they
wanted their money back.
--
There is no possibility of social justice on a dead planet except the equality
of the grave.
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