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Charity Grant

mowzermowzer Feels At HomeRegistered Posts: 67
Hi

Not sure if this is a silly question, but i'm preparing the accounts of a small charity which has received a grant during the year of about £30,000. They had not used it by the year end and i am unsure of where to put it in the accounts.

Should it just be shown as a debtor in the balance sheet and disclosed in the notes?

Please advise :001_smile:

Comments

  • PoodlePoodle Experienced Mentor Registered Posts: 711
    Hi Mowzer,

    If you have received a grant then surely this would be a credit?

    If the grant was given for a specific reason then I would put this into a restricted fund account at the bottom part of the balance sheet to be drawn upon at some point in the future.

    Poodle
  • mowzermowzer Feels At Home Registered Posts: 67
    Thanks

    It is for something specific so that helps
  • ben179vben179v Just Joined Registered Posts: 3
    I would show it as deferred income on the balance sheet, it should not hit the SOFA.
  • mowzermowzer Feels At Home Registered Posts: 67
    Thanks
  • DeanDean Experienced Mentor DevonRegistered Posts: 646
    I'm sure Steve will correct me if i'm wrong here but this is dealt with under SSAP 4:

    http://www.frc.org.uk/asb/technical/standards/pub0399.html

    As the funds have been received but not spent at the year-end I would think that they would be held as a current liability on the balance sheet.

    Regards

    Dean
  • PoodlePoodle Experienced Mentor Registered Posts: 711
    Hi

    I usedto be employed by a large university that was a charity and regularly received restricted funds.

    I used to treat these as follows:

    On receipt the funds were credited to a 'restricted funds' reserve. As the funds were spent for the restricted purpose matching amounts were journaled as income to the SOFA.

    I also had to add a 'restricted funds reconciliation' note to the accounts.

    Unless the SORP has changed then I would imagine that this is still what you have to do

    Poodle
  • peugeotpeugeot Experienced Mentor Registered Posts: 624
    Dean,

    SSAP 4 deals with Government Grants, rather than charitable grants. SSAP 4 is considered to be somewhat beyond the scope of charities as there is a 'SoRP'.

    It is a long time since I have done any work on charities and am a bit out of date, but I do know the income recognition for charities has been recently revamped. I have provided a link which should answer your queries:

    http://www.stewardship.org.uk/documents/SORP_2005_detailed_draft.pdf

    I think section 6 might shed some light for you all.

    Kind regards
    Steve
  • PoodlePoodle Experienced Mentor Registered Posts: 711
    Thanks Steve,

    I tried to find this document but could not

    Poodle
  • paulrpaulr Feels At Home Registered Posts: 48
    Good morning,
    just tagging onto the good points raised previously;
    either show as restricted or unrestricted funds,-- restricted if monies are
    designated for specific purposes,
    best wishes,
    paulr.
  • mowzermowzer Feels At Home Registered Posts: 67
    peugeot wrote: »
    Dean,

    SSAP 4 deals with Government Grants, rather than charitable grants. SSAP 4 is considered to be somewhat beyond the scope of charities as there is a 'SoRP'.

    It is a long time since I have done any work on charities and am a bit out of date, but I do know the income recognition for charities has been recently revamped. I have provided a link which should answer your queries:

    http://www.stewardship.org.uk/documents/SORP_2005_detailed_draft.pdf

    I think section 6 might shed some light for you all.

    Kind regards
    Steve

    Thanks a lot

    I feel a lot more confident seeing it for myself :001_smile:
  • James FJames F New Member Registered Posts: 8
    I work for a charity and it should be shown in the SOFA and a credit balance on the balance sheet under deferred income.
  • mowzermowzer Feels At Home Registered Posts: 67
    Thanks James

    I only do accounts for the one charity voluntarily, so needed a bit of a reminder about where things go!

    Think i've got it sorted now :001_smile:
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