CHARITY FORMAT GUIDE. Relate Accounts Production. ROI UK

Transcription

1 CHARITY FORMAT GUIDE Relate Accounts Production ROI UK

2 Contents Introduction... 3 Key Points... 3 Creating a Charity Dataset... 4 Charity Setup Tool... 6 Funds... 7 Resources... 9 Costs Posting Journals Comparative Year Journals Income from Charitable Activities Compliance Database Additional Details Trustees / Directors Report Summary Income and Expenditure Account Statement of Financial Activities (SoFA) Analysis Notes Analysis of Resources Expended Analysis of Resources Expended and Related Income Analysis of Support and Governance Costs Relate Software

3 INTRODUCTION The Charity format in RAP has been designed to be compliant with the Charities SORP according to FRS 102 and the FRSSE, effective January 2015 and in addition, provides the necessary citations and required disclosures of the Companies Acts 2014 (Ireland) and Companies Act 2006 (UK) for Charitable Companies. KEY POINTS There are a number of important points to note before users commence posting. 1. The Charity format has been developed around the concept of Funds, Resources and Costs. It is vital that users understand how each of the afore mentioned items are used in the accounts before posting, and how these impact certain pages within the accounts. 2. Funds and Resources must be set up before users commence posting journals. Names of Funds and Resources are user definable. Please see the section in relation to Funds and Resources for further details. It is important to note that once a Fund or Resource has been used in a journal the name of the Fund or Resource cannot be changed. These are the names that will show as fund headings and descriptions of charitable activities, income and resources on the accounts pages. Users must identify these names first and ensure that they will not need to be changed. 3. The Statement of Financial Activities (SoFA), provided in place of the P&L account as required by the SORP, calculates figures primarily using Funds and secondly using Resources. It does not look specifically at the nominal code used. Using this logic, any posting which contains a Resource type will show on the SoFA. For this reason, users should not use a Resource type or Cost type when posting to Balance Sheet nominal codes. 4. Due to the above mentioned calculation method single line journals, accruals, prepayments, invoices, payments and receipts, if used, will not produce figures to the accounts pages correctly. Only Multiple Line journals or Trial Balance journals should be used when posting to the Charity template in Relate Accounts Production. 3 Relate Software

4 CREATING A CHARITY DATASET To create the Charity dataset choose File -> New, choose the New icon in the left corner or right click on the screen and select new. Figure 1 4 Relate Software

5 Figure 2 Entity Type: Choose Charity from the dropdown provided. Country of Incorporation: Choose the country of incorporation for the charity Template: This will automatically show as Charity, no other option is available. Version: 1.0 This refers to the xml files being used to produce the accounts pages. This cannot be changed. Name: Name of the Charity Password: Applying a password to a set of accounts is optional. If you want to add a password, enter it in the first box and confirm the password in the second box. If a password is lost or forgotten it can be cleared by a member of the support team. An authorisation must be sent by the main partner of the practice to support@relate-software.com before the support team can clear the password. Start Date/End Date: Enter the financial reporting period of the charity, this can be changed at a later date, if required, in Tools, Period Dates, providing there are no postings outside the new date range. Accounts Description: This will automatically fill to Financial Statements followed by the year end date. There is no bookkeeping module or working paper module for the Charity format. When the relevant information has been entered select OK to create the client and dataset. You must now use the Charity Setup Tool to create Funds, Resources and Costs. 5 Relate Software

6 CHARITY SETUP TOOL The Charity Setup tool allows for the creation and enabling of the Funds, Resources and Cost categories needed to report the charity s financial information in an accurate and compliant manner. Using the tool, you will create the descriptions which will be used in disclosing the applicable Fund and Resource categories in the Statement of Financial Activities (SOFA) and Resource and Cost categories for the notes. After they are created, you are then provided with the appropriate posting options when completing your journals. The Charity Setup Tool can be accessed by going to Tools > Charity Setup. Here you will see 3 options, Funds, Resources and Costs. (Figure 3) Figure 3 6 Relate Software

7 FUNDS Please note that there are 3 Main Fund Headings which are disclosed in the SOFA Restricted Funds which are subject to special trusts / wishes, where the monies held may only be spent on specific projects or items specified by the donor. You can create a maximum of 5 Restricted Funds. Unrestricted Funds available for the purposes of the charity, to be spent as the trustees see fit. They can be Designated (earmarked for a particular purpose) or General (Generally Available). You can create a maximum of 5 Unrestricted Funds. Endowment Funds made up of donations that have been given to a charity to be held as capital. They can be Permanent (Trustees have no power to convert the funds to income) or Expendable (Trustees have a discretionary power to use the funds as income). You can create a maximum of 5 Endowments. RAP allows for the creation of 5 funds under each of the 3 main headings to allow for the breakdown of the funds in the Analysis of Net Assets by Fund and Analysis of Movements on Funds notes. In total you can have 15 Funds. To create Funds choose Funds from Tools, Charity Setup, Funds. Figure 4 7 Relate Software

8 The below screen will be displayed. Figure 5 Fund Code: This is automatically generated by the system. Fund Description: Short Description of the fund, this is user definable but does not show on the accounts. It can be seen from the Fund dropdown provided when posting a journal. Fund Name: This is the name of the Fund that will be shown on the SoFA. Once a Fund has been used in a journal the Fund Name cannot be changed. Please ensure the correct name has been entered. Fund Type: There are three types, Restricted, Unrestricted or Endowment. If the fund type is Unrestricted or Endowment you will have further types to choose from. Unrestricted Type: This is only applicable when the Fund Type has been selected as Unrestricted. You will have 3 options to choose from; Designated, General and Pension. Endowment Type: This is only applicable when the Fund Type has been selected as Endowment. You will have 2 options to choose from; Permanent and Expendable. When all of the relevant information has been entered select Save. Continue to do this until you have created all of the necessary Funds. 8 Relate Software

9 RESOURCES There are 10 overall Resource Types available within Relate Accounts Production which you can choose to use. Each Resource type allows for the creation of a number of categories. For example you can have 5 Categories of Costs of Charitable activities. Each category can then be given a user defined name which will show on the face of the accounts. The Resource headings in the Analysis of Resources Expended note comes from the names you give to the Cost of Charitable Activities categories, therefore your Cost of Generating Funds and Cost of Charitable Activities Resources should share the same names. It is important not to exceed the number of categories allowed for each type as these will not show on the resources expended note. Also once a resource has been used in a journal the name of that resource cannot be changed. Please ensure the correct name is given to each Resource Type when it is being created. The Resource Types are specific for Incoming Resources and Resources Expended. Please see table below. Resource Type Income/Expense Categories Code Activities to Generate Funds Incoming Resource 5 ActGenFunds01 05 Income from Charitable Activities Incoming Resource 10 InCharActs01 10 Other Incoming Resources Incoming Resource 1 OthIncRes Voluntary Income Incoming Resource 6 VolInc01 06 Investment Income Incoming Resource 1 InvOthInc Exceptional Items Incoming Resource 1 ExceptItems Cost of Generating Funds Resources Expended 5 CostGenFunds01-05 Cost of Charitable Activities Resources Expended 5 CostCharActs01-05 Other Resources Expended Resources Expended 1 OthResExp Realised Gains and Losses on Investments Income/Expense 1 RealGnLsInv 9 Relate Software

10 To create Resources go to Tools, Charity Setup, Resources. Select Add Figure 6 Resource Code: Automatically generated by the system. Resource Name: This is the description which you will see on the face of the accounts. Ensure the description is correct when creating the Resource as this cannot be changed once used in a journal. Resource Type: Choose the relevant Resource from the drop down menu. When all details have been entered select Save. Continue to do this until you have created all of the required Resources. 10 Relate Software

11 COSTS There are 11 overall Cost Types which can be used in Relate Accounts production. 8 of the Cost Types are broken down into categories which the user can then assign postings to in the journals. Costs cannot be created by users; the cost types will be available in each dataset by default. Costs are designated for SORP and non SORP, in a new dataset when Enable Only is selected in the Costs section you will then see only the Cost Types applicable for SORP. Costs are used in conjunction with specific Resource Types, this will determine whether or not a posting is analysed correctly in the notes to the accounts. The below table explains the Costs designation and which Resource should be used in conjunction with that Cost. Cost Cost Type Resource SORP Direct Direct Cost of Generating Funds Yes Cost Cat 1 11 Other Cost of Charitable Activities Yes SuppCostCat 1 4 Support Cost of Charitable Activities Yes GovCosts 1 6 Governance Cost of Charitable Activities Yes Support Governance To be used in Comparative Journals Only under SORP To be used in Comparative Journals Only under SORP Direct 1 4 Direct No Support 1 4 Support No SupportCostCat 5 6 Support No Governance 1 4 Governance No GovCostCat 1 3 Governance No Costs can be edited after being used in journals, unlike Funds and Resources. To edit a Cost Type go to Tools, Charity Setup, Costs. 11 Relate Software

12 Figure 7 Cost Code: This is automatically created by the system, this cannot be changed. Cost Description: This is automatically created by the system, this cannot be changed. Cost Type: The drop down allows you to choose from 4 options, Other, Direct, Support and Governance Cost Name: User definable name assigned to the cost type. Basis of Apportionment: This is a user definable section for Governance and Suport Cost Types only. This will allow the user to show the apportionment basis of the costs in the note. Cost Enabled: Only costs which have been enabled can be selected in journals. Support and Governance cost types are only used for comparative postings. 12 Relate Software

13 POSTING JOURNALS To post current year journals in Relate Accounts Production Charity Format go to Journals on the left panel, then choose either Multiple Line or Trial Balance journals. Figure 8 When posting journals a Fund will have to be selected and a Resource and Cost where required. Only Profit and Loss nominal codes require a resource and cost. If resources and costs are assigned to Balance Sheet nominal codes the figures will not show on the accounts correctly. Due to the above method only Multiple Line journals or Trial Balance journals should be used when posting to the Charity template in Relate Accounts Production. Ensure that no Resources or Costs are assigned to Balance Sheet nominal codes. When you have selected either Multiple Lines or Trial Balance journals you will be presented with the below screen. 13 Relate Software

14 Figure 9 Step 1: Choose a Fund from the drop down menu. Figure 10 Step 2: Enter the nominal code you are going to debit or credit, reference number and any notes applicable. Step 3: Determine if the posting is related to incoming resources or resources expended. Choose a Resource from the drop down menu provided. Note only P&L codes require resources. 14 Relate Software

15 Figure 11 Step 4: Choose a Cost from the drop down menu provided. Ensure that the Cost code is related to the Resource type selected. Keep in mind that certain costs have to be used in conjunction with resources. See the Costs section for more details. Figure 12 Step 5: Enter the debit or credit value. Continue posting in this manner, the journal can be saved when the Difference is Relate Software

16 COMPARATIVE YEAR JOURNALS To post or edit comparative year figures, choose Comparative Journals from the left panel and then select New. Below is the Comparative Journal layout Figure 13 Figure Choose the required Fund from the drop down provided. 2. Choose the year that the postings relate to. You can choose to post for up to 5 comparative years. 3. Enter the nominal code, reference number and notes. 16 Relate Software

17 4. Choose the Resource type for the posting, as is the case with current year postings, only P&L items require Resource types. 5. Choose a Cost Type from the drop down provided. Ensure that the cost is relevant to the Resource selected. Note that if the posting relates to support or governance, only choose Support or Governance Costs, rather than SupportCostCat for example, as only the total cost is needed for presentation in the Analysis of Resources Expended note. 6. Enter the debit or credit amount. The journal can be saved when the difference is Comparative figures can be viewed using the Comparative tool from the Nominal Ledger screen, but amounts cannot be edited from here. INCOME FROM CHARITABLE ACTIVITIES When posting the Income from Charitable activities in the Comparative Period Cash should be selected in the Cash/Accrual column of the journals, if the income from these activities was put against the expenses generated by the same activities in the comparative period. The income figures will show in the Analysis of Resources Expended and related income note which you can optionally present in your accounts as it is not a mandatory disclosure note. There is a tick box under Reporting Parameters Accounts Disclosure Parameters in the Compliance Database to show/hide this note. 17 Relate Software

18 COMPLIANCE DATABASE The layout of the Compliance Database for the Charity format follows a similar layout to the Company format. Below are the main differences and sections that need to be populated for the Charity format. ADDITIONAL DETAILS Under Additional Details you can specify the normal details applicable in the company format and the following additional information; Is the Charity a Charitable Company Is the Charity a Company Limited by Guarantee The Charity number or CRA number must be entered in the box provided relevant to the country in which the charity was registered. Figure Relate Software

19 TRUSTEES / DIRECTORS REPORT The Compliance Database allows you to define additional information and disclosures for the Trustees / Directors Report applicable under the Companies Act and the SORPs. Specific text boxes have been provided which are user definable in the Directors Report section. These are as follows; Objectives and Activities Achievements and Performance Financial Review Structure, Governance and Management Reference and Administrative Details Exemption from Disclosure Funds held as Custodian Trustee on behalf of Others Figure Relate Software

20 SUMMARY INCOME AND EXPENDITURE ACCOUNT The Charity format also allows for a Summary Income and Expenditure Account in addition to the Statement of Financial Activities which is provided in place of the P&L account as required by the SORP. The option to include the Summary Income and Expenditure Account is given by a tick box in the Additional Information in the Compliance Database. Figure 17 SUMMARY INCOME AND EXPENDITURE ACCOUNT for the year ended 31 March 2015 Statement of Financial Activities Gross income Unrestricted funds 1,637,000 Restricted funds 25,000 1,662,000 1,818,000 Total income 1,662,000 1,818,000 Total expenditure (1,807,000) (1,812,000) Net income/(expenditure) (145,000) 6,000 The charitable company has no recognised gains or losses other than the results for the year. The results for the year have been calculated on the historical cost basis. Figure Relate Software

21 STATEMENT OF FINANCIAL ACTIVITIES (SOFA) The SoFA is provided in place of the P&L in the Charity format as required under SORP. The SoFA will display 4 Fund columns, accumulating all Funds created under four main column headings. 1. Unrestricted Funds 2. Pension Reserves 3. Restricted Funds 4. Endowment Funds All journals posted with Resource types assigned will show on the SoFA whether a Profit and Loss or Balance Sheet nominal code was used. For this reason, only P&L nominal codes should have Resources Assigned. Please see below for an example of the layout of the SoFA. STATEMENT OF FINANCIAL ACTIVITIES (SoFA) Unrestricted Restricted Total Total Funds Funds Notes Incoming Resources Generated funds: Voluntary income Donations and legacies 35,000 25,000 60,000 44,000 Activities to generate funds Income from other trading activities 479, , ,000 Investment and other income 2 18,000-18,000 16,000 Charitable activities: Grants from charitable activities 521, ,000 - Admission charges and programmes 392, , ,000 Support from sponsors and local authorities ,000 Visiting arts exhibitions and installations 42,000-42,000 45,000 Education related income including residences 150, , ,000 Total incoming resources 1,637,000 25,000 1,662,000 1,818,000 Resources Expended Commercial trading operations 323, , ,000 Charitable activities: Concerts and stage performances 1,220,000 5,000 1,225,000 1,422,000 Visiting arts exhibitions and installations 83,000-83,000 - Education including residences 172,000 4, ,000-1,475,000 9,000 1,484,000 1,422,000 Total resources expended 4 1,798,000 9,000 1,807,000 1,812, Relate Software

22 Net incoming/(outgoing) resources (161,000) 16,000 (145,000) 6,000 Transfers between funds (5,000) - (5,000) - Net movement in funds for the year (166,000) 16,000 (150,000) 6,000 Reconciliation of funds Balances brought forward at 1 April ,650,000 12,000 1,662,000 1,655,000 Balances carried forward at 31 March ,484,000 28,000 1,512,000 1,661,000 Approved by the board on 26 April 2015 and signed on its behalf by J Later Trustee F Nearer Trustee Figure Relate Software

23 ANALYSIS NOTES ANALYSIS OF RESOURCES EXPENDED The Analysis of Resources Expended note shows the Resources expended by the Charity. The amounts shown here are generated from journal postings where the Resource types Cost of Charitable Activities (CostCharActs01-05) and Cost of Generating Funds (CostGenFunds01-05) are used with specific Cost types. The below image will show you how these postings are split using Resources and Costs. Figure CostGenFunds : Direct 2. CostCharActs01 05 : CostCat CostCharActs01 05 : Direct 4. CostCharActs01 05 : SupportCostCat CostCharActs01 05 : GovCost Relate Software

24 ANALYSIS OF RESOURCES EXPENDED AND RELATED INCOME The Analysis of Resources Expended and Related Income note shows Costs of Charitable Activities and Income from Charitable Activities relating to voluntary income. The note will show postings where Resource type CostCharActs01 05 was used, with any cost type accumulated under Support, Other, Direct and Governance. These amounts show as Costs. All other figures are generated from postings to nominal codes 011, 012, 013, 014 with Resource type InCharActs01 10 used. ANALYSIS OF RESOURCES EXPENDED AND RELATED INCOME FOR CHARITABLE ACTIVITIES Concerts and stage performances Visiting arts exhibitions and installations Education including residences Total Total Charitable activities: Direct and other costs Costs (1,225,000) (83,000) (176,000) (1,484,000) (1,422,000) Grants from charitable activities Admission charges and programmes Support from sponsors and local authorities Visiting arts exhibitions and installations Education related income including residences 521, , , , , ,000-42,000-42,000 45, , , ,000 Totals (312,000) (41,000) (26,000) (379,000) (259,000) Figure Relate Software

25 ANALYSIS OF SUPPORT AND GOVERNANCE COSTS. The analysis of Support and Governance costs note uses the Resource type Cost of Charitable Activities, CostCharActs01 05 in conjunction with Cost types SupportCostCat1 4 and GovCosts1 6. These are the only postings which will show in this note. The Basis of Apportionment column shows the user definable details entered in Tools, Charity Setup and Costs. The Basis of Apportionment allows users to detail how the amounts were apportioned to each Governance and Support Cost categories. Using the Basis of Apportionment is optional. ANALYSIS OF SUPPORT AND GOVERNANCE COSTS Support Basis of 2015 Apportionment Catering and Venue Hire 21,000 Invoiced Events Salaries & Wages 64,000 Time General Office 19,000 Pro Rata to staff full time equivalents 104,000 Governance 2015 Catering and Venue Hire 1,000 Invoiced Events Salaries & Wages 22,000 Time General Office 6,000 Pro Rata to staff full time equivalents Audit Fees 10,000 Governance Accountancy services 5,000 Governance Legal and professional 4,000 Governance 48,000 Total 152,000 Figure 22 Disclaimer - Relate Software strives to ensure that all of its formats are as compliant as possible. However, the duty of ensuring complete compliance with the relevant legislation and accounting framework is always that of the individual preparer of the accounts. 25 Relate Software