Restricted Net assets rolling into unrestricted

Sheila King

We are new to FE and when we set it up we understood that the transfer accounts would balance the funds. However, it appears that the transfer accounts are moving the restricted net asset balances to the unrestricted fund.

Also in our old system, which was not a fund accounting system, we had to do net asset releases manually and used a net asset release equity account of 3999 for the release which rolled into Net Asset account of 3000.

I'm wondering how other non-profits have the account structure and process set up to facilitate this properly in FE. This is the first non-profit that I've worked for and I was used to the account structure that we had to use in the prior system which did not do fund accounting as FE does. I'm afraid we set it up wrong to be able to do this process correctly. Thank you!

Kevin Brazell

@Sheila King
the transfer accounts will roll up into the defined Fund balance / net assets defined on the fund. If you have transfer accounts with a balance in each fund, they will roll up to each fund balance account you have per your fund. All together they should net to zero. Also release is not done manually. FE reports have a mock close function that shows what it would look like. Until a fiscal year is hard closed, which isn't available yet in WebView, the system doesn't officially close out the IS to Fund balance.

Sheila King

@Kevin Brazell
Thank you, Kevin. That is helpful. We did record the beginning equity by fund and by project so the balances are there. We must've had something set up wrong in the beginning for it to roll into the unrestricted fund. I'll need to figure out how to fix that.

Sheila King

@Kevin Brazell
One more question, while I do see on our reports that that the Change in Net Assets rolls into the Net Assets on the financial statements, our audited statement presentation require that we show the revenue net asset releases moving from restricted to unrestricted in the revenue section. Do you know if there a way to facilitate that without additional entries in FE?

Natalie Smith

@Sheila King
Hi, we still manually enter our transfers as we don't like the automatic function in FE as it doesn't align with our audit and financial statement presentation. You can turn off the default transfer option in settings. We have transfers accounts setup as 4000s (Revenue) and debit restricted and credit unrestricted as needed. To balance between funds we also debit/credit cash to complete the entry. We then updated our chart organizer to present how we prefer. I attached a screenshot of the journal entry. Screenshot 2024-12-18 151935.png

Sheila King

@Natalie Smith
Thank you Natalie! This is very helpful.