Hi, Michael, We’ve corresponded about this in the past.
I was keen to keep track of restricted funds within GC in a way which would make unspent restricted income persist as restricted funds beyond the year end, and you suggested the use of a Liability account for this purpose, Unfortunately, the accountant who examines our accounts before submission to OSCR (the Scottish Charities Regulator) advised that this isn’t an acceptable way to handle restricted funds in the UK. The problem with using the income accounts (as below) for the various types of Income, is that the money not spent (in our case on bursaries for musicians who wouldn’t otherwise be able to attend our courses) doesn’t persist in the that account after the year end the way a liability would. A collection at the final-day concert which is advertised as being destined for use as bursaries won’t be spent until the next year’s course. On the other hand, if income received for restricted donations is accounted for in this way, and funds paid out as bursaries are also accounted for in a separate expense account it should be easy enough to keep a year-on-year tally of the remaining restricted funds. In practice, we probably spend more than we receive on bursaries each year, but a church roof might be a longer-term job. Michael > On 25 May 2024, at 23:08, Michael or Penny Novack > <stepbystepf...@comcast.net> wrote: > > You did NOT have to have separate books! > > In ONE set of books you can have as many "bank accounts" in the ledger ans > you have bank accounts. Just give them different names so that you can tell > them apart. We may have some difficulties with cross pond differences in > language. Thus your "current account" means what I would call a "checking > account" and you must not confuse "current account" with the asset category > "current assets" << all accounts containing immediately available funds >> > > Thus: > Assets > Current assets > Current account > Savings account << where you are keeping restricted funds >> > > OK, now your donations are all being deposited into the checking account even > though some of those donations are restricted. You are asking how to deal > with that? Under income you could have: > Income > unrestricted donations > untransferred restricted donations > restricted donations > > When you make a deposit into the checking account of a bunch of donations (of > both sorts) you use the top two. Hint: easiest to have an asset under current > assets "undeposited cash" and as donations come in they go there credited to > either unrestricted donations or untransferred. Now your actual bank deposit > is an easy transaction, just undeposited to checking. Later, when you > transfer from the "checking account" to the "savings account" <note> you > would ALSO be transferring between "untransferred restricted donations" to > "restricted donations". NOTE -- your reference to "building society" manes a > different bank? Still that way your side of the pond? > > As for your question about statements, almost all gnucash reports allow you > to SELECT which accounts are to be included. You'd be able to produce > statements for just the unrestricted funds, just the restricted, both > together, etc. > > Do note that while you can't use restricted funds for other than their > intended purpose THE REVERSE IS NOT TRUE <<well, that would depend on your > organizational bylaws but would be most unusual >> That's why you would want > to use restricted funds for their intended purpose first (before using any > non-restricted funds for that purpose). You want to clear the restriction. > > Michael D Novack > > PS --- The usual caveat, I'm not "licensed" to give accounting help. For what > it's worth, I've been Treasurer for a number of non-profits. > > PPS -- if you are following this, but your organization does not have that > second bank account, you could track the restriction using a liability. > > > > > > > On 5/25/2024 4:13 PM, Chris Green wrote: >> I am the treasurer of a very small parish church council in the UK. >> >> We have to present separate accounts for restricted and unrestricted >> accounts, this is a legal requirement and also required by our diocese. >> >> At the moment restricted funds are, basically, building funds and are >> kept in an interest paying savings account. The unrestricted funds >> are kept in a bank current account. >> >> My problem is that many donations to the restricted account (e.g. >> donations that the donor has specifically said must be for repairs of >> the church roof) go into the bank current account and have to be >> transferred from there to the building society account. >> >> For the last couple of years I have separate GnuCash data for the >> current account and the building society account, this has worked >> reasonably well. However we are now moving into a period of getting >> the roof repaired and much more money will have to move via the >> current account. >> >> So, how should I deal with this using GnuCash? I can see that I could >> separate accounts into two hierarchies (in a single database) - >> restricted and unrestricted with expenses and income for each, etc. >> However is it then possible to present separate end of year statements >> for them? This would simplify incoming donations which are all to a >> single bank account. >> >> Or are there other strategies which work better for this sort of >> situation? >> >> I emphasise that this is a small church, annual income is only of the >> order of £5000 and we have no full-time or paid employees. So the >> solution has to be simple and manageable by part-time, >> non-professional people. >> > > -- > There is no possibility of social justice on a dead planet except the > equality of the grave. > > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org <mailto:gnucash-user@gnucash.org> > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
