Discussion:Board Designated Fund
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Discussion Forum Index --> Accounting Questions --> Board Designated Fund
| 17 May 2008 | |
| Hi, I am a newbie to this forum.
my initial engagement client's board has designated 500k from its permanent endowment fund's appreciation portion. Usually, these appreciation of endowment should sit in temp restricted before they are used according the terms of endowment. It looks to me the board did not have the right to do so in the first place. Prior issued f/s classfied this 500k as permanent restricted asset, but GAAP says board designated should be always in unrestricted column. I personally think it should be temp restricted...have you guys seen this situation before? thanx for any input. | |
| May 17, 2008 | |
| If the investment income is temporarily restricted, the board is not allowed to designate it. The board is only allowed to designate unrestricted net assets, which is why they are included in that section on the Statement of Financial Position. | |
| 17 May 2008 | |
| thanx for the input, Natalie. our Final f/s leave this 500k in unrestricted...which I disagreed. | |
| May 17, 2008 | |
| Is there any wiggle room in interpretation of the donation agreement? What is your role with this client? Are you compiling, reviewing or auditing the statements? If so, you probably should modify your report for a GAAP departure. | |
| 19 May 2008 | |
| audit, well, i am the senior staff, neither have a final say on what to issue nor sign off the report, i guess if trouble comes around in the future, i should be off the hook, right?? | |
| May 19, 2008 | |
| Sammy, I suggest you read up on your responsibilities. If you disagree with something and it is over-ridden by management or the client, you need to make a memo for the file. I realize that puts you in an awkward position, but that is what the standards require. | |
| 19 May 2008 | |
| As Natalie says, (been there, done that)a memo for the file is necessary to protect your license. | |
| 20 May 2008 | |
| yes, i understand the documentation is necessary, can i document sth without my boss signs off my WP? or will email be suffient to document my disagreement? The report issue date is 05/15, i still have 60 days to do this. | |
| May 20, 2008 | |
| My understanding is that it needs to be a workpaper in the audit file. | |
| 20 May 2008 | |
| Yes, a memo in the workpaper file is needed. You can't hide it from the boss. | |
Bushmaster (talk|edits) said: | 20 May 2008 |
| What does your boss say? | |
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