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Making Sense of Fund Accounting

Fund accounting is a concept unique to charities. Whilst all charity funds must be spent on a charitable purpose, some funds (those that are restricted) can only be used for the specific charitable purpose for which they were given. This paper explains the most often-used types of funds and considers how each fund can be used.

Topics covered:

  • What are the different types of charity funds?
  • Types of unrestricted funds: General and designated;
  • Types of restricted funds: Income and endowment;
  • Can money be transferred between different types of funds?
  • Accounting for different types of funds;
  • What does the Charity SORP say about fund accounting?