Re: [GNC] Dealing with discounts when not using Business Features
But even if formally restricted, I believe it's not a liability but a _contingent_ liability. It only becomes a liability if the organization makes a decision not to use it in that way, or if a deadline runs out. Stan Brown Tehachapi, CA, USA https://BrownMath.com On 2023-06-01 11:06, Michael or Penny Novack wrote: > Whether restricted donations are properly treated as liabilities depends > on: > > 1) Whether formally or informally restricted (moral restriction only) > << in other words, whether would need to return if not used for > designated purpose >> ___ 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.
Re: [GNC] Dealing with discounts when not using Business Features
On 6/1/2023 12:24 PM, Michael Hendry wrote: Thanks, Michael. IIRC, we exchanged some posts on the list some years ago, when I created Liability accounts for donations that were earmarked by the donors for particular purposes and later had to backtrack, following the advice of the accountant who examines our books. Indeed, I think you may have suggested this method. See interpolations below. Regards, Whether restricted donations are properly treated as liabilities depends on: 1) Whether formally or informally restricted (moral restriction only) << in other words, whether would need to return if not used for designated purpose >> 2) Your jurisdiction Follow the advice of your accountant Michael D Novack ___ 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.
Re: [GNC] Dealing with discounts when not using Business Features
Thanks, Michael. IIRC, we exchanged some posts on the list some years ago, when I created Liability accounts for donations that were earmarked by the donors for particular purposes and later had to backtrack, following the advice of the accountant who examines our books. Indeed, I think you may have suggested this method. See interpolations below. Regards, Michael > On 1 Jun 2023, at 15:14, Michael or Penny Novack > wrote: > > >> As I said, I haven’t been using the Business Features because they’re an >> added complication, and because our accounts are kept on a cash basis. >> >> A Bursary is a grant made to assist a talented student who might otherwise >> be unable to afford a course. It’s doesn’t usually involve competition (like >> a scholarship), and is intended to encourage a talented individual to take >> up a course s/he couldn’t otherwise afford. > > > I knew what a "bursary" was --- but this more a difference in the usage of > the term "scholarship" across the pond. American English not always the same > as yours. Long ago we ceased distinguishing "scholarship" that way, taking > the meaning to be just "grant for the purpose of study". > > How to treat this (with reference to accounting, not really a gnucash > question) depends on: > > a) Do you want to inflate income/expense of not? Same net done either way. Neither. The student pays the net course fee, usually with a deposit and one or more additional tranches, before attending the course. What I wanted was to be able to report the net course fees as an income account, but be able to report the gross amount by student including the net course fee along with any discounts and bursaries so that we can easily detect over- or under-payments and take appropriate action. Sometimes a student will pay the full amount and subsequently qualify for a discount because another member of the family has signed up, for example.At present, there isn’t a simple way of determining how much we’re “spending” on discounts and bursaries from the books. > > b) How independent (in a legal sense) is the source of these bursary funds? > In a moral sense? << thus here, a quasi independent fund might be legally > under the umbrella of a 501(c)3 << not its own 501(c)3 >> . Thus I am on the > boards of a pair like that, the quasi independent fund << used to be legally > under a different 501(3)3 >> and the 501(c)3 it is now under (moved there > when that organization became 501(c)3. The purpose of the quasi-independent > fund being to subsidize the attendance of children at events put on by the > now parent organization at a site that does not have lower rates for children. We haven’t had donations for bursaries recently, and applications are rare in any case. In essence, we forgo the income that would have come from the student with a bursary, in the same way as we forgo income when granting discounts. > > So very much like your "bursary" fund. But because the special purpose org > was once legally independent (and de facto still is) this is handled by > negotiated settlement between the boards, one agreeing to subsidize X amount > of the children's rate and the organization just sends out registration forms > with the resulting lower rate per child. I am giving this particular example > because IN ADDITION parents who still could not afford that could apply for > "scholarship" help << US usage* >> > > Michael D Novack > > * The split in usage goes back a ways. In the very beginning "scholarships" > meant the same both sides of the pond. But then over here we began getting > things like benefactors setting up funds with special terms (eg: descendants > of so and so: needy students form the town of X, etc.) and in some cases the > legislators had funds in their "gift and favor". Institutions might offer > "scholarships" to applicants with athletic prowess. Or just need**. So we now > no longer associate "scholarship" as being won by competitive academic exam. > > ** In some cases this is closer to the UK sense in that there are some top > academic unis that are well endowed and consider "you made the cut to get in" > as winning the exam and will then offer aid toward the tuition of students > who need it. Regards, Michael ___ 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.
Re: [GNC] Dealing with discounts when not using Business Features
As I said, I haven’t been using the Business Features because they’re an added complication, and because our accounts are kept on a cash basis. A Bursary is a grant made to assist a talented student who might otherwise be unable to afford a course. It’s doesn’t usually involve competition (like a scholarship), and is intended to encourage a talented individual to take up a course s/he couldn’t otherwise afford. I knew what a "bursary" was --- but this more a difference in the usage of the term "scholarship" across the pond. American English not always the same as yours. Long ago we ceased distinguishing "scholarship" that way, taking the meaning to be just "grant for the purpose of study". How to treat this (with reference to accounting, not really a gnucash question) depends on: a) Do you want to inflate income/expense of not? Same net done either way. b) How independent (in a legal sense) is the source of these bursary funds? In a moral sense? << thus here, a quasi independent fund might be legally under the umbrella of a 501(c)3 << not its own 501(c)3 >> . Thus I am on the boards of a pair like that, the quasi independent fund << used to be legally under a different 501(3)3 >> and the 501(c)3 it is now under (moved there when that organization became 501(c)3. The purpose of the quasi-independent fund being to subsidize the attendance of children at events put on by the now parent organization at a site that does not have lower rates for children. So very much like your "bursary" fund. But because the special purpose org was once legally independent (and de facto still is) this is handled by negotiated settlement between the boards, one agreeing to subsidize X amount of the children's rate and the organization just sends out registration forms with the resulting lower rate per child. I am giving this particular example because IN ADDITION parents who still could not afford that could apply for "scholarship" help << US usage* >> Michael D Novack * The split in usage goes back a ways. In the very beginning "scholarships" meant the same both sides of the pond. But then over here we began getting things like benefactors setting up funds with special terms (eg: descendants of so and so: needy students form the town of X, etc.) and in some cases the legislators had funds in their "gift and favor". Institutions might offer "scholarships" to applicants with athletic prowess. Or just need**. So we now no longer associate "scholarship" as being won by competitive academic exam. ** In some cases this is closer to the UK sense in that there are some top academic unis that are well endowed and consider "you made the cut to get in" as winning the exam and will then offer aid toward the tuition of students who need it. ___ 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.
Re: [GNC] Dealing with discounts when not using Business Features
On 1 Jun 2023, at 02:50, Murugan Muruganandam wrote: > > michael > > for Bursary accounting purposes you can use the liability option > > Bursary account funding from the donor > Cr Liability: Bursary:Donor 1 : $1000 > Dr Assets: Bank : $ 1000 > Payment to student invoice > Dr Assets: Bank : $125 (student pays) > Cr Income: Fees: $375 > Dr Liability: Bursary: Donor 1: $250 (bursary pays) > > > > Saludos Cordiales > > Murugan Thanks, Murugan. Some years ago I set up a Liability Account for cash received specifically for bursaries but was advised by the accountant who examines our books prior to their submission to the Office of the Scottish Charity Regulator (“OSCR”) that this wasn’t acceptable under Scottish charity accounting rules - we should keep track of this cash separately from our books. We don’t have any such restricted funds now, and meet the cost of bursaries along with general expenditure. Our accountant does the examination of our books for a nominal sum, but I may have to impose this query on him to be sure of avoiding wasting his time when I submit our records for his approval. Regards, Michael ___ 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.
Re: [GNC] Dealing with discounts when not using Business Features
michael for Bursary accounting purposes you can use the liability option 1. Bursary account funding from the donor * Cr Liability: Bursary:Donor 1 : $1000 * Dr Assets: Bank : $ 1000 2. Payment to student invoice * Dr Assets: Bank : $125 (student pays) * Cr Income: Fees: $375 * Dr Liability: Bursary: Donor 1: $250 (bursary pays) Saludos Cordiales Murugan From: Michael Hendry Sent: Wednesday, May 31, 2023 6:00 PM To: Vincent Dawans ; Murugan Muruganandam ; the_stan_br...@fastmail.fm Cc: Gnucash userlist Subject: Re: [GNC] Dealing with discounts when not using Business Features On 31 May 2023, at 20:46, Vincent Dawans wrote: > > Personally I would create your Discounts and Bursary accounts as income > accounts, possibly even as subaccounts of your main income account for that > product/service. Yes they will only have rebates (debits) in them, but they > are not an expense, they are a form of reduced income (by choice). The > distinction is important in terms of "true accounting representation". Think > of it with an extreme case. If I said I charge $1 million for this email > advice, but then give you a $999,999.99 discount, as a financial analyst, > would you want to see a P with a $1 million income and a $999,999.99 > expense or just a $0.01 income and zero expenses? Because you control each > side here (the price charged and the rebate), they are one and the same, so > it would be the second scenario. > > By it's OK to put it as a "debit" income account, you still have the info in > the details of the accounts and can get it out in a report to show how much > income you forfeited, but a high-level P will give you the correct income > (with the rebate) instead of the extra expense. > > Sincerely, > > Vincent Dawans Thanks, Vincent, Murugan and Stan. As I said, I haven’t been using the Business Features because they’re an added complication, and because our accounts are kept on a cash basis. A Bursary is a grant made to assist a talented student who might otherwise be unable to afford a course. It’s doesn’t usually involve competition (like a scholarship), and is intended to encourage a talented individual to take up a course s/he couldn’t otherwise afford. I’ll look further into Vincent’s and Stan’s suggestions, as I don’t think my method of receiving the students’ payments into the Income: Course Fees account and then topping them up from Expense: Discount and Expense:Bursary to reach the fee that would actually be due will work. Regards, Michael ___ 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.
Re: [GNC] Dealing with discounts when not using Business Features
On 31 May 2023, at 20:46, Vincent Dawans wrote: > > Personally I would create your Discounts and Bursary accounts as income > accounts, possibly even as subaccounts of your main income account for that > product/service. Yes they will only have rebates (debits) in them, but they > are not an expense, they are a form of reduced income (by choice). The > distinction is important in terms of "true accounting representation". Think > of it with an extreme case. If I said I charge $1 million for this email > advice, but then give you a $999,999.99 discount, as a financial analyst, > would you want to see a P with a $1 million income and a $999,999.99 > expense or just a $0.01 income and zero expenses? Because you control each > side here (the price charged and the rebate), they are one and the same, so > it would be the second scenario. > > By it's OK to put it as a "debit" income account, you still have the info in > the details of the accounts and can get it out in a report to show how much > income you forfeited, but a high-level P will give you the correct income > (with the rebate) instead of the extra expense. > > Sincerely, > > Vincent Dawans Thanks, Vincent, Murugan and Stan. As I said, I haven’t been using the Business Features because they’re an added complication, and because our accounts are kept on a cash basis. A Bursary is a grant made to assist a talented student who might otherwise be unable to afford a course. It’s doesn’t usually involve competition (like a scholarship), and is intended to encourage a talented individual to take up a course s/he couldn’t otherwise afford. I’ll look further into Vincent’s and Stan’s suggestions, as I don’t think my method of receiving the students’ payments into the Income: Course Fees account and then topping them up from Expense: Discount and Expense:Bursary to reach the fee that would actually be due will work. Regards, Michael ___ 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.
Re: [GNC] Dealing with discounts when not using Business Features
As Michael said, this is more an accounting question than a GnuCash question. Therefore, the usual caveats about regulations in your country. I was going to propose the same thing as Vincent, but I forbore because I don't know what a "bursary" is. But I'll say I quite agree with Vincent's approach. I think his "what would you want to see on a P?" is the salient point. When I set up GC for the charity on whose Board I serve, a similar question arose with donations made by PayPal -- are the PayPal fees an expense or a reduction of income? I set up a placeholder account "Income:Net Donations" with two subaccounts, "Income:Donations" and "Income:Fees". A typical transaction would be Debit: Cash $9.51 Credit:Donations $10.00 Debit: Fees $0.49 We _don't_ "control each side", in Vincent's words since Paypal is a separate entity and takes its cut before we get the rest, but even so I think this is appropriate because then the P shows donations net of Paypal fees, which after all is the amount that we actually collect. In your case, where you _do_ control both sides, I think it makes even more sense. Stan Brown Tehachapi, CA, USA https://BrownMath.com On 2023-05-31 12:46, Vincent Dawans wrote: > Personally I would create your Discounts and Bursary accounts as income > accounts, possibly even as subaccounts of your main income account for that > product/service. Yes they will only have rebates (debits) in them, but they > are not an expense, they are a form of reduced income (by choice). The > distinction is important in terms of "true accounting representation". > Think of it with an extreme case. If I said I charge $1 million for this > email advice, but then give you a $999,999.99 discount, as a financial > analyst, would you want to see a P with a $1 million income and a > $999,999.99 expense or just a $0.01 income and zero expenses? Because you > control each side here (the price charged and the rebate), they are one and > the same, so it would be the second scenario. > > By it's OK to put it as a "debit" income account, you still have the info > in the details of the accounts and can get it out in a report to show how > much income you forfeited, but a high-level P will give you the correct > income (with the rebate) instead of the extra expense. > > Sincerely, > > Vincent Dawans > > On Wed, May 31, 2023 at 10:27 AM Michael Hendry > wrote: > >> More of a bookkeeping query than a GnuCash problem, but here goes… >> >> I am a trustee of a local jazz education charity, the main event being a >> jazz summer school with residential and non-residential options. >> >> We offer discounts of 5% for two or more family members attending, 10% for >> group bookings, and also offer bursaries, but none of is these recorded >> explicitly in the books at the moment. >> >> I plan to introduce two new accounts - Expenses:Discounts and >> Expenses:Bursary - and use these to “top-up” any individual’s payments to >> Income:Course Fees to the appropriate level. This way, each player will be >> represented in Income:Course fees as having paid either the full >> residential fee or the full non-residential fee, and under- or >> over-payments will be easer to pick up using a saved report, which can also >> itemise the discounts and bursaries using the Memo fields to identify the >> player (as opposed to the person paying, recorded in the Description) and >> the type of discount or bursary. >> >> Does anyone spot any elephant traps that I’m missing? >> >> Regards, and thanks, >> >> Michael ___ 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.
Re: [GNC] Dealing with discounts when not using Business Features
Michael have you thought about using customer billing for each student, this way you can achieve most of the recording and get reports in the system. Saludos Cordiales Murugan From: gnucash-user on behalf of Michael Hendry Sent: Wednesday, May 31, 2023 1:26 PM To: Gnucash userlist Subject: [GNC] Dealing with discounts when not using Business Features More of a bookkeeping query than a GnuCash problem, but here goes… I am a trustee of a local jazz education charity, the main event being a jazz summer school with residential and non-residential options. We offer discounts of 5% for two or more family members attending, 10% for group bookings, and also offer bursaries, but none of is these recorded explicitly in the books at the moment. I plan to introduce two new accounts - Expenses:Discounts and Expenses:Bursary - and use these to “top-up” any individual’s payments to Income:Course Fees to the appropriate level. This way, each player will be represented in Income:Course fees as having paid either the full residential fee or the full non-residential fee, and under- or over-payments will be easer to pick up using a saved report, which can also itemise the discounts and bursaries using the Memo fields to identify the player (as opposed to the person paying, recorded in the Description) and the type of discount or bursary. Does anyone spot any elephant traps that I’m missing? Regards, and thanks, Michael ___ 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. ___ 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.
Re: [GNC] Dealing with discounts when not using Business Features
Personally I would create your Discounts and Bursary accounts as income accounts, possibly even as subaccounts of your main income account for that product/service. Yes they will only have rebates (debits) in them, but they are not an expense, they are a form of reduced income (by choice). The distinction is important in terms of "true accounting representation". Think of it with an extreme case. If I said I charge $1 million for this email advice, but then give you a $999,999.99 discount, as a financial analyst, would you want to see a P with a $1 million income and a $999,999.99 expense or just a $0.01 income and zero expenses? Because you control each side here (the price charged and the rebate), they are one and the same, so it would be the second scenario. By it's OK to put it as a "debit" income account, you still have the info in the details of the accounts and can get it out in a report to show how much income you forfeited, but a high-level P will give you the correct income (with the rebate) instead of the extra expense. Sincerely, Vincent Dawans On Wed, May 31, 2023 at 10:27 AM Michael Hendry wrote: > More of a bookkeeping query than a GnuCash problem, but here goes… > > I am a trustee of a local jazz education charity, the main event being a > jazz summer school with residential and non-residential options. > > We offer discounts of 5% for two or more family members attending, 10% for > group bookings, and also offer bursaries, but none of is these recorded > explicitly in the books at the moment. > > I plan to introduce two new accounts - Expenses:Discounts and > Expenses:Bursary - and use these to “top-up” any individual’s payments to > Income:Course Fees to the appropriate level. This way, each player will be > represented in Income:Course fees as having paid either the full > residential fee or the full non-residential fee, and under- or > over-payments will be easer to pick up using a saved report, which can also > itemise the discounts and bursaries using the Memo fields to identify the > player (as opposed to the person paying, recorded in the Description) and > the type of discount or bursary. > > Does anyone spot any elephant traps that I’m missing? > > Regards, and thanks, > > Michael > > > > > ___ > 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. > ___ 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.
