[OSGeo Finance] Quickbooks, reserve funds...

[Ken Tamura]

Hello all,
Here are my responses and suggestions:

It appears that the items in question are funds received by the organization and are 'ear-marked' for specific programs/initiatives.  The proper accounting treatment for funds of these types for a non-for-profit accounting generally are classified in the Balance Sheet cash account (this is how donations are recorded: debit cash; credit income).  The way to show that these funds are to be tracked and specified for certain activities, they are often tracked in a cash account classified as "restricted cash/fund".  This account tracks at various levels of detail as needed to manage and report.  All other general income/donations/etc. are classified as "general funds".

I think there are two choices to record and track "restricted" and "general" funds:

1.  Track at a detail level:  It would best to create a restricted cash account for each standard activity in the balance sheet.  Then you can track activity in/out of this account for reporting if needed.  All general funds are recorded to one general fund cash account.

2.  Track at a high level:  I would best to create one restricted cash account and as long as it is classified in the correct restricted account, the finance team knows how much they have to manage.  All general funds are recorded to one general fund cash account.


My recommendation is #1.


Ken Tamura
Geospatial Solutions of Autodesk, Inc.
415-507-8313 (w)    415-299-1704 (c)

-----Original Message-----
From: finance-bounces at lists.osgeo.org [mailto:finance-bounces at lists.osgeo.org] On Behalf Of Tyler Mitchell (OSGeo)
Sent: Wednesday, October 15, 2008 6:07 PM
To: Paul Ramsey
Cc: finance at lists.osgeo.org
Subject: Re: [OSGeo Finance] Quickbooks, reserve funds...

Everything I'm reading points to using the quickbook "classes"
approach somehow.

On 15-Oct-08, at 5:08 PM, Paul Ramsey wrote:

> No, they aren't retained earnings, they are, as Jo said, Liabilities.
> They are "things we owe to other people".  (Retained earning are just
> this years new equity.)  I'm trying to figure out how a liability
> account would interact with things like an invoice from a project
> maintainer, paid out of the project pool.  Unlike other invoices, this
> one doesn't represent a new liability, since all the project money is
> already accounted for as a liability. I wonder of this model isn't a
> little beyond the QuickBooks paradigm.
>
> P.
>
> On Wed, Oct 15, 2008 at 5:01 PM, Tyler Mitchell (OSGeo)
> <tmitchell at osgeo.org> wrote:
>> Frank said it all, but to toss in a few more terms, I'm wondering
>> if these
>> should be falling under Retained Earnings in the balance sheet.
>>
>> Tyler
>>
>> On 15-Oct-08, at 4:43 PM, Frank Warmerdam wrote:
>>
>>> Ken Tamura wrote:
>>>>
>>>> I will reply on this tonight when i have time to read the whole
>>>> thread.
>>>> Quick question first:   the funds contributed that you want to
>>>> capture as
>>>> detail, what is the obligation or restriction that deems it
>>>> necessary to
>>>> track over time?
>>>
>>> Ken,
>>>
>>> 75% of project sponsorships funds received for projects like GDAL
>>> are
>>> held in trust by OSGeo on behalf of the project to be dispursed
>>> by the
>>> project steering committee as they see fit.  We (as OSGeo) have an
>>> obligation to be able to report on the funds available and the
>>> transactions
>>> made on behalf of the project when requested.
>>>
>>> We also need to distinguish between general funds that the OSGeo
>>> board
>>> can spend freely and those we are holding for the projects and
>>> that we
>>> should
>>> not normally be touching.  Currently the balance sheet reports
>>> don't make
>>> this
>>> clear and we can get an inflated sense of the funds available for
>>> general
>>> use.
>>>
>>> BTW - I say held in trust, but I mean that in a general sense
>>> rather than
>>> a
>>> legal sense.  The projects are not separate legal entities - they
>>> are
>>> essentially just parts of OSGeo.
>>>
>>> Some additional detail is available in the "OSGeo Finance
>>> Management"
>>> section
>>> of the project sponsorship document:
>>>
>>>  http://wiki.osgeo.org/wiki/Project_Sponsorship
>>>
>>> Best regards,
>>> --
>>>
>>> ---------------------------------------
>>> +--------------------------------------
>>> I set the clouds in motion - turn up   | Frank Warmerdam,
>>> warmerdam at pobox.com
>>> light and sound - activate the windows | http://pobox.com/~warmerdam
>>> and watch the world go round - Rush    | Geospatial Programmer
>>> for Rent
>>>
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>> http://lists.osgeo.org/mailman/listinfo/finance
>>

Tyler Mitchell
Executive Director
Open Source Geospatial Foundation
tmitchell at osgeo.org
P: +1-250-277-1621
M: +1-250-303-1831


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