Releasing donor restricted accounts after posting

[LydiaGirl123]

I've already posted up to today (June 30), but will have to release some funds from a few donor restricted accounts soon. Since the transactions are already posted, how do I release amounts from those accounts? Can I make separate entries? or do I have to go back, reverse the entry and release the amounts and re-post?

Thanks!
Lydia

[Zorak]

You can make separate entries without a problem. Just open the Enter Transactions screen and enter the header information (you can give them the same check number and date if you like) then click the "Release From Restriction" button and proceed as normal.

The transaction will automatically balance itself, so just save it and move on.

[LydiaGirl123]

I figured it out by experimenting, but now I have a different problem/question. I did the release just like you described in your response and then I did a Change in Equity report to see if my amounts had been moved from the income to the release column. I posted the entries first before I did the report. The amount was still there in the Income column and not in the Released from Restrictions column. Can you tell me why?

Thanks,

Lydia

[JohnDMeyers]

Lydia:

Your income amount won't change on the "Changes in Equity" report because of a release. However, you should have seen a negative amount in the "Release from Restriction" column for the amount that you released.

What are your income account numbers associated with this restriction? You should have one income account in the range of your "temporarily restricted income" numbers, and another "release" income account specific to this restriction (usually in the 4800 range).

If you run an account activity on the former, you should see a credit for the income(s) coming in, and that's all.

If you run an account activity on the latter, you should see a Debit for the amount of the release. If not, something went wrong when you hit the "Release from Restrictions" button, or something is not set up correctly.

The equation that the "Changes in Equity" report shows is this:
Income, minus the amount released, equals the remaining amount in the equity account for that restriction.

[Jeff]

Did you post the release transactions? The changes in equity report doesn't have an option to show unposted transactions like the balance sheet and income & expenses statements do.

[JArter]

We are using PC+ v10.4 - and are in the process of revising our chart of accouts to have restricted balances appear on the "Balance Sheet" (equity section). Do I set up an equity account for each of the types of restrictions we have (eg. unrestricted, temporary restricted, permanently restricted)? Would this allow us to have balances appear on the "Statement of Activities" report?

Thank you

[Jeff]

Make sure your release account in your chart of accounts has the option selection that says "This account is a release account." This is how the system knows if that account is a release account or just another income account.

On the Statement of Activities, amounts appear in the Unrestricted, Temp Restircted, and Perm Restricted depending on what type of equity account the income closes to.

ie if the income account closes to a temp restricted equity account, it amount is shown in the temp restricted column.

[LydiaGirl123]

Sorry to be so long in responding. Been busy.

Here are the account numbers and info as of July 4:

Equity Acct. 3202-103 $190 has been released (credit)
Income Acct. 4202-103 $190 is current balance (credit column)
Release Acct. 4802-103 $190 (debit)

I'm trying to clear out all donor restricted accounts that still have funds left in them. Manual checks have been written and I need to reflect a zero amount in the donor restricted accounts. I think I've done something wrong because now (August 5) on the Changes in Equity I've got $190 in income and $260 release from restrictions, with an ending balance of $450.

Will the ending balance ever be zero, or will it be the total of what's been put in and has now been released?

Any help is appreciated.

[Zorak]

If the amount released from restriction has added money to the restricted account, it sounds like the debits and credits in your release transaction may be backward. The release account for any restriction should only ever be debited, which is negative income.

It is possible to spend more money than you took in in a given period, or vice versa, but if the amount coming in matches the amount going out, you should balance to zero for the month.