The best way I can answer this is with an example we experienced. For years, our preschool ministry ran its own books on it's own software. Value adjustments were setup in a real confusing way at that time, to show on the church's books the net worth of the preschool ministry. One of my jobs was to get the preschool's books merged with the church's books within Powerchurch, so all the bookkeeping was centralized. But the balances in some of the accounts were not matching between the preschool's actuals and the church's value adjustments.
My solution was to make a journal entry using an account called "Fund Balance Adjustment"...funny name, now that I think of it- - another adjustment. Anyway, the example would go like this:
Fund Balance is 01-3001-000 (a fund balance category acct) (this is the whole church's equity)
Fund Balance Adjustment is 10-3001-010 (an acct in individual preschool's accounting fund) (a fund balance category acct)
Transaction would be a credit to Fund Balance Adjustment, and a debit to Fund Balance, thereby correcting the fund balance for the account. Then I would make sure I would put notes in with the journal entry as to why I needed to adjust the fund balance....in this case it was for the account conversion to Powerchurch, to make the church's books match the actual account balances in the preschool's records.
Switzerland Community Church