Page 164 - Demo
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Identify and explain any material amounts that have been designated or set aside at the end of the accounting period. This will include amounts set aside for the future care of members of the institute and monies set aside from which to make (or generate monies to make) future grants and donations
Indicate the likely timing of the expenditure of any material amounts designated – for example, monies set aside for the care of members will be expended over the remainder of their lives
Identify the amount of funds that cannot be realised because they are tied up in properties and other tangible xed assets that are essential to the charity’s work
State the amount of “free” reserves that the charity holds at the end of the accounting period i.e. the amount arrived at after deducting from the total reserves the amounts that are restricted, the amounts that are designated and the amounts tied up in tangible xed assets (including property)
Compare the resultant free reserves with the charity’s reserves policy and explain, where relevant, what steps are being taken to bring the amount of free reserves actually held in line with the policy
Example – reserves policy and nancial position
The balance sheet shows total funds of £7,777,551 (2015 - £7,067,834).
£750,000 (2015 - £750,000) has been designated by the sisters as a mission fund, the income of which is used to support missionary work, both in the UK and overseas, associated with individual members of the congregation.
£5,250,000 (2015 - £5,250,000) has been designated by the trustees to provide for the sisters in their retirement. The fund has been calculated using actuarial principles, whilst having regard to the resources actually available.
Restricted funds amounted to £881,792 (2015 - £788,606) and represent the generalate funds, being monies given by the Generalate of The Congregation of the Sisters of the Sacred Hearts and of Perpetual Adoration to be used to nance the overseas missions of the congregation and the broader work of the congregation overseas.
160 Chapter 8
