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CS Professional · CSR and Social Governance · Financial and Non-financial Reporting of Different Non-Corporate Entities

Vidya Sahayak Society received Rs 10,00,000 as a specific donation for constructing its school building, and Rs 40,000 as general donations for the year. Under the standard treatment for non-corporate non-profit entities, how should these be shown?

The Rs 10,00,000 specific building donation is a capital receipt and goes to the Building or Capital Fund in the Balance Sheet. The Rs 40,000 general donation is a revenue receipt and is credited to the Income and Expenditure Account.

  1. ARs 10,00,000 added to the Capital/Building Fund in the Balance Sheet; Rs 40,000 credited to Income and Expenditure AccountCorrect
  2. BBoth amounts credited to Income and Expenditure Account
  3. CRs 10,00,000 credited to Income and Expenditure Account; Rs 40,000 to Capital Fund
  4. DBoth amounts added directly to the Capital Fund

Explanation

Specific donations for capital purposes such as a building are capital receipts, shown in the Balance Sheet. General donations are revenue receipts and are credited to Income and Expenditure Account. Treating the building donation as income would wrongly inflate the surplus.

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