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Reduce reserves bought forward

Hi,

We have recently taken over a charity's accounts who have a bought forward reserves account of £180, the board want this to be reduced substantially because it is giving the wrong impression to their funders (that they have a lot of money and don't need funding). The account consists of surplus bought forward from when the charity began. What would be the Journal entries (if any) if this is possible to do?

Many Thanks

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24th May 2012 16:13

I don't think you can just reduce reserves like this!

If the reserves are tied up in assets which are not liquid - like property - then the charity is probably short of funds (i.e. cash) and can legitimately ask for support on this basis.

If you want to give more detail, may be we can help further?

SA

 

 

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