Prize fund

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 October 2011 if donations recd for meeting revenue expenses are credited to i and e ac and for meeting capital expenses fund accing is used,,the y if money recd for distribution of prizes being revenue in nature is shown as a prize fund

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
Follow

11 October 2011 well when the funds are received for meeting revenue expenses or for general purpose of the organisation then it's the donation of general nature therefore it is to be recognised as Income for the period

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
Follow

11 October 2011 Whenever the funds are recieved for any specific purpose not necessarily the capital expenses, the fund accounting is to be used.

donation recd for distributing prizes is specific purpose donation thereby categorised as Prize fund

e.g. of above donation for distributing prizes, providing scholarship, organising the particular sport / other event etc.

all are of revenue nature but fund accounting is reqd

Message likes : 1 times

Upgrade to CAclubindia Pro. Subscribe Now!

Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2011 sir,if that is the case then y is it that donation recd for maintainance of an asset(being specific in nature) is credited as income and fund accounting is not used ?

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
Follow

11 October 2011 well check that whether the same has spent first and the same was recived or it may be the case the donation may not be specific in nature

A Donation is specific only when it is given with the instruction for its utilisation.
Further appropriation of donation on the basis of need does not require fund accounting

Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2011 thanks...seems like the maintainance is not specific in nature .. also if i receive a donation for distribution of prizes and ther is no prize fund existing,,,i should still create a p.f ?