QB Issue Resolution:
Statement of Cash Flows will show changes in Balance Sheet accounts, so that will show rebalances between your various Equity accounts: Restricted and Unrestricted, and Temp Restricted, if you have all of these.
This is not really the purpose of the Income Statement: ” but without showing temp rest assets released, the reports are not accurate.”
The income statement is the Activity. The Activity results in changes to Net Assets (fund balances) which is Equity. That’s why you rebalance Equity. Or, for instance, a Governmental unit uses 9XXX accounts to reallocate between funds.
“I found an explanation which involves 2 general JEs for each deposit or invoice- one involving debiting and crediting the equity accounts (for the SoFP)”
You can use one JE for each transaction; one JE for the month. Or, on the details of a Check, you can list the rebalance right there, such as:
Office Equipment $500 bought using restricted funds = The Expenses tab entry. Next line, Unrestricted Net Assets Negative $500 and the next line, Restricted Equity Positive $500. That =
Credit Bank $500
Debit Office Equipment $500
Debit Restricted Equity (goes down, since you spent some)
Credit Unrestricted Fund Balance (because Expense will close here at year end, anyway).
Or, you use Classes and Subclasses. Example:
Grant Income is Restricted. That is how the Sales Receipt shows the inflow. That means all Expenditures already are using the same Class, which is a restricted program or purpose, and there is no separate Release of restriction. The By Class columns already show it was restricted when you got it, and that the use was the restricted purpose.
Or, the Grant is Reimbursement only. That means the Sales Receipt uses a Liability item, Class = restricted program/purpose, or Class = Restricted.
Then, you enter the expenditures as two-sided items Billable to the Grantor as Customer, and class track for your unrestricted program or purpose. Make the invoice selecting Add Time and Costs; put your Unrestricted Class here. Put the grant prepayment liability item on a Credit Memo for this same date using the Restricted purpose or class. Apply the CM to pay the invoice.
Now you have Restricted Liability In and Restricted Liability Out; and the Spending is the Unrestricted class or purposes, as is the Invoice that flows to revenue which.
“and another for debiting and crediting income accounts (for the SoIE)”
You need to be very careful when using JE and Class; you make reporting errors if you Mix the class on the one JE = the reporting is Out of Balance By Class. Example: moving Restricted Income to an Unrestricted Class, means you have not got the right Asset, Liability or Equity for the change in Net Assets on the Balance Sheet by Class.
“This seems like a huge amount of work, as I would have to do many JE’s myself. Also, it doesn’t seem straight-forward. Iven’s explanation of tracking assets through classes is incomplete at best”
It’s a general guidance. QB is a set of tools we use to meet our specific needs. That’s like complaining that a Hammer doesn’t come with complete directions on how to use it to build a hospital vs a dog house; it only shows you how to Hold it.
“and I am stuck half-way between trying to track with classes (which I can’t get to generate proper reports because there is nowhere which describes release of temp restricted assets) and trying to track with sub-accounts, which (again) without proper explanation in Iven’s book, is over my head.”
Did you open your Samples files to learn from? At the No Company Open Screen, bottom Right, the big button.
Resolution for Issue 'Using classes to track temp restricted and unrestricted assets, How do I generate SoIE and SoFP reports which show ‘temp restricted assets released from restriction’?' available: Yes (Solved).
Source: Intuit Community forum.
Using classes to track temp restricted and unrestricted assets, How do I generate SoIE and SoFP reports which show ‘temp restricted assets released from restriction’?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.Support for Balance
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