Q: How to record a grant

[Conrad Canterford]

Ben Stanley wrote:
> <jalapeno> Here's a silly accounting question:
> <jalapeno> I'm the treasurer for a church...
> <jalapeno> Let's say I get a grant for $500.00 for a specific purpose
> <jalapeno> The money is deposited into the church bank account
> <jalapeno> It is spent in smaller transactions over the course of the
> following year or so
> <jalapeno> How do I keep track of it?
> <jalapeno> 1) open a new sub-account of the bank account? (makes it
> difficult to reconcile the bank account)
> <jalapeno> 2) create a new liability, started off by an amount equal to
> the grant. Deposit the grant money into the bank account. Spending the
> grant money reduces the liability.
> <jalapeno> I'm doing 2), but it means I have to check the balance of the
> bank account against my liabilities every time I write a cheque...
> <jalapeno> But it does make it easy to reconcile the bank statements.
> :-)
> 
> If there is a better way of doing it, I'd like to hear it.

Have you considered making the grant an "equity" account rather than a
liability? Transfer money from the equity account to the bank account
when you receive the grant. I haven't thought through the wider
implications of this, but its the first thing that came to my mind and
is the solution I would have thought logical.
I can discuss this more with you on IRC if you wish.

Conrad.
-- 
Conrad Canterford  (conrad@mail.watersprite.com.au)
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