Exam code:0452 & 0985
Statement of financial position for clubs & societies
What is the layout of the statement of financial position of a club or society?
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The statement of financial position for clubs and societies is prepared in a similar way to other types of businesses
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The statement is split into assets and liabilities
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The main difference is the capital/equity section is replaced with an accumulated fund section
What is an accumulated fund?
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The capital of a club or society is referred to as the accumulated fund
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This is made up of
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any capital which is invested into the organisation
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the accumulation of surpluses of income over expenditure over time
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At the end of each year
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A surplus is added to the accumulated fund
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A deficit is subtracted from the accumulated fund
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How do I calculate the accumulated fund?
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If the accumulated fund is not given in the question, you will need to calculate it by using the accounting equation
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Assets = Capital + Liabilities
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Accumulated fund is the capital so the equation becomes:
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Assets = Accumulated fund + Liabilities
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Use the two known elements of assets and liabilities to find the accumulated fund
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Accumulated fund = Assets – Liabilities
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How do I use the accumulated fund to calculate surplus or deficit?
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To calculate the surplus or deficit for the year:
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Calculate the accumulated fund at the start of the year
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Calculate the accumulated fund at the end of the year
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Calculate the change in the accumulated fund
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If it has increased then this is the surplus
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If it has decreased then this is the deficit
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Worked Example
The Chill, Chat and Knit Club offers knitting lessons to club members, as well as selling knitting supplies. It had the following assets and liabilities at 1 January 2023:
|
$ |
|
|
Club furniture and fittings |
1 200 |
|
Inventory of knitting supplies |
300 |
|
Amount owed to suppliers |
120 |
|
Bank balance |
820 |
At 31 December 2023 the assets and liabilities had the following balances:
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$ |
|
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Club furniture and fittings |
1 080 |
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Inventory of knitting supplies |
180 |
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Amount owed to suppliers |
80 |
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Bank balance |
1 150 |
Calculate the surplus or deficit for The Chill, Chat and Knit Club for the year ended 31 December 2023.
Answer
Calculate the accumulated fund at the start of the year.
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$ |
$ |
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Assets |
||
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Club furniture and fittings |
1 200 |
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Inventory of knitting supplies |
300 |
|
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Bank balance |
820 |
2 320 |
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Less: Liabilities |
||
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Amount owed to suppliers |
120 |
|
|
Accumulated fund |
2 200 |
Calculate the accumulated fund at the end of the year.
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$ |
$ |
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Assets |
||
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Club furniture and fittings |
1 080 |
|
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Inventory of knitting supplies |
180 |
|
|
Bank balance |
1 150 |
2 410 |
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Less: Liabilities |
||
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Amount owed to suppliers |
80 |
|
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Accumulated fund |
2 330 |
The accumulated fund has increased so there has been a surplus. Find the difference between the start and the end of the year.
$2 330 – $2 200 = $130
The surplus for the year was $130
Worked Example
The Locust Football Club is an amateur football club with members of all ages.
The following information was provided at 1 April 2023.
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$ |
|
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Equipment at cost |
16 500 |
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Provision for depreciation of equipment |
3 300 |
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Trade payables |
2 100 |
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Subscriptions prepaid |
500 |
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Accumulated fund |
? |
The following information was provided at 31 March 2024.
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$ |
|
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Trade payables |
1 250 |
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Subscriptions prepaid |
1 130 |
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Subscriptions owing |
800 |
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Bank balance |
4 780 |
Additional notes:
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The income and expenditure account for the year ended 31 March 2024 had a surplus of $3 160
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No equipment was sold or purchased during the year
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Depreciation is charged on equipment using the reducing balance method at 20% per annum
Prepare the statement of financial position of Locust Football Club at 31 March 2024.
Answer
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Calculate the accumulated fund at the start of the year
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Calculate the total assets
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Net book value of equipment ($16 500 – $3 300) = $13 200
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Calculate the total liabilities
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Trade payables = $2 100
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Subscriptions prepaid = $500
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Total liabilities = £2 100 + $500 = $2 600
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Calculate the difference
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$13 200 – $2 600 = $10 600
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Calculate the total depreciation to date
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Find the year’s depreciation using the net book value of the equipment
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20% × $13 200 = $2 640
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Find the total depreciation to date
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$3 300 + $2 640 = $5 940
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Find the current net book value of the equipment
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$16 500 – $5 940 = $10 560
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Identify whether the subscriptions owing and prepaid are assets or liabilities
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Subscriptions prepaid are current liabilities
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Subscriptions owing are current assets
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Prepare the statement using the required format.
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The Locust Football Club Statement of Financial Position at 31 March 2024 |
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$ |
$ |
$ |
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Non-current Assets |
Cost |
Provision for Depreciation |
Net Book Value |
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Equipm |
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