Church Use of GNUCash

[Mike or Penny Novack]

On 12/21/2017 4:03 PM, Aaron Laws wrote:
> On Thu, Dec 21, 2017 at 9:44 AM, Mike or Penny Novack 
> <stepbystepfarm at dialup4less.com 
> <mailto:stepbystepfarm at dialup4less.com>> wrote:

> My question: can you say more about using a liability (rather than 
> asset subaccounts) for restricted funds? Perhaps a link or two, or 
> (ideally) a reference to some gaap? That would be excellent!
>
> Thanks for your continued enrichment of the public at large through 
> the gnucash-user mailing list. You are a tremendous resource.
Have you ever looked at the financial statement of a largish 501(c)3?  
<< so a formal, audited financial statement >>

If so, did you not see (in the balance sheet portion of the report) the 
liability for "donor restricted funds" (and possibly other sorts of 
restrictions)

The idea is that the money was received into the regular banks accounts 
but sort of not there/available because a corresponding liability. If 
and when money has been expended for a reason which would qualify for 
the use of those funds an adjustment transaction is made for the amount 
no longer restricted. Not necessarily with each expenditure. Possibly 
only quarterly (for the total of qualifying expenses that quarter) but 
decisions like THAT depend on volume.

Michael

PS: I am NOT an accountant qualified to be giving advice. I simply am 
doing books, preparing financial statements, a doing the filings for 
some non-profits.

PSS: Yes, I have also used the children of an asset account 
(partitioning a bank account). But that was only with INFORMAL 
restrictions that the organization was not required to respect if 
circumstances changed. Thus in this "organ fund" example, you might 
choose to do that IF (for example) it was decided not to have an organ, 
the church could keep that money and use it for something else -- or 
would they have to ask the individual donors whether in that case they 
wanted their money back.

-- 
There is no possibility of social justice on a dead planet except the equality of the grave.