Hi all,
I am helping a charity to do their bookkeeping for this year and the manager wants to start to record the assets acquired during the year, account for depreciation, include prepayments made in relation to their rent and any accrued expenses.
I know that all these items can be calculated using the accruals basis, however they have been preparing the accounts using the cash basis (Receipts&Payments) and I checked that you would not be able to record the transactions listed above using this method. However, on the Charity Commission Receipts&Payments account pack you have space to include your assets and liabilities on the Statements of Assets and Liabilities.
Could someone help me to clarify if I can record any of these transactions in cash accounting or not? And if not, is there any way around it or I need to change to accruals basis?
Any help is going to be really appreciated, thanks.
Replies (4)
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The manager is telling you that they want to move over from cash accounting to accruals accounting aren't they?
Agree with John
I agree with John, although the format for R&P accounts includes a statement of assets and liabilities at period end. Have a look at CC16a on the Charity Commission website.
Not necessarily
These matters may have, hitherto, been absent from the Statement of Assets and Liabilities and the manager might want to correct the omission. It needn't necessarily affect the Receipts and Payments accounting.
Clearly, you need to seek clarification from the manager.