CIC Association

Serving Community Enterprise

Hi

We are in the process of preparing our year end accounts, prepared by our Treasurer and verified by an accountant not linked to our organisation (as is often required by grant funders) 

We can not get agreement as to whether unspent grant funds (to be used in the next financial year) should be included in the balance sheet (with same amount reported as a creditor in the balance sheet too) or not - on the basis they are not owned by us and therefore not an 'asset'

Clarification would be much appreciated

Thank you

Views: 78

Replies to This Discussion

Hi Lucie, absolutely you should show them on the balance sheet as a creditor (Deferred Income). Then as you use them in the following years you will release them (Dr Deferred Income, Cr Income) to match against the expenditure. Hope that helps. Andy

Thank you Andy - V helpful

I just want to double check this is still applies when the funds are restricted - as that seems to be the point of disagreement at our end...

The funds have been given to you to spend but have a caveat on them as to what they can be spent on. This shouldn't affect the accounting treatment we mentioned before.

Thanks Andrew

Unspent funds should be shown as deferred income on the balance sheet as rightly pointed out in Andrew's post.  It will reduce your overall surplus - logic behind this is that the funds will be used in following years on projects straddling your year end or on projects not yet started in your reporting year.

Thanks Araine!

We understand that the grant money in hand is held on behalf of the project still to be delivered, so it is not an asset but a debt owing, like a manufacturer's order, say, that has been paid for up front, but not yet delivered.. That is how we have set it out on our balance sheet.

Thanks Margaret

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