How to close a financial year & how to keep 'earmarked' funds

[Maf. King]

On Thursday, 25 May 2017 16:05:27 BST Anita Graves wrote:

> 
> I would very much like to know how these funds should be entered in the
> accounts.  You take money from the asset accounts (checking or cash) and
> put it in special ‘earmarked’ expense subaccounts, then draw the funds
> toward zero as they are spent, and the balances go forward from year to
> year, if that is the case.
> 

Hi Anita,

I would record the earmarked contributions carried forward as Asset accounts, 
not expense accounts.

IIRC, you have one bank account, but you have "imaginary" bank accounts to 
restrict the funds within that bank account

I would have 
Assets:Bank:Unrestricted
Assets:Bank:Restricted:National
Assets:Bank:Restricted:BuildingRepair
and so on.

In the chart of accoutns, you will be able to see the overall bank balance, 
and each register will show you how much is earmarked for repairs etc.

When you reconcile, check the box to "include sub-acccounts"

Donations are Income:Donation:MoreBreakdownIfYouNeedIt -> Asset:Bank:Wherever

The only glitch is if you have a donor giving to 2 restricted funds at once - 
it won't be clear in the reconcile dialogue box; it will show as 2 
transactions that reconcile at the same time. (ie you tick one and the 2nd is 
ticked automatically)

As you spend the restrictions, then you transfer from Asset:Bank:<x> to 
Expenses:<y>

And I personally would not use new files year to year.  the reports can handle 
the periods just fine - and it can be useful to compare 2 periods side-by-side; 
you can't do that within GC if the data is split into different files.  

As ever, subject to local laws, customs & practices, which is beyond my ken. 
YMMV etc.

HTH,
Maf.