We use Solar for a charity running a community building. We have recently received a grant from our local authority for a capital project which we will part fund. What is the correct way to record 1) the receipt of the grant, 2) the payment of the grant money to the contractors doing the work, and 3) our contribution which will be coming from our normal current account? We need to reflect the increase in our capital assets without appearing to have made a profit from the grant money. The grant itself has been paid into our current account already.
Hi Nigel,
Here's how I would record the transactions:
Create an income account called 'Grant Income' (if you haven't already done so) then record a Money Received transaction from this income account deposited into the Cheque Account.
and 3) Record a Money Paid Out transaction from the Cheque Account to the appropriate expense account.
To see your contribution to the project allocate each of the above transactions to a job that represents the capital project. To do this click the More Options button in the bottom-left corner of the transaction window then select 'Job or Department'. The 'Profit or Loss - By Job or Dept' will then show the grant income and the total expenses - the contribution from your charity will be shown as a negative figure in the Net Income line.
Please check the above approach with your accountant as he/she may prefer a different method.
Regards,
