Fund-based Accounting System

A Fund-based Accounting System is an accounting system that makes use of funds accounts.

• Context:
  • It can (typically) be used in Not-For-Profit Entities, such as Governmental Accounting System.
  • It can be supported by a Fund-based Accounting Information System.
  • …
• Counter-Example(s):
  • Cash-based Accounting.
• See: Not-for-Profit Entity, Cash-based Accounting.

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References

2016

• (Wikipedia, 2016) ⇒ https://en.wikipedia.org/wiki/fund Retrieved:2016-9-28.
  • Fund may refer to: … Fund accounting, an accounting system often used by nonprofit organizations and by the public sector

• (Wikipedia, 2016) ⇒ http://en.wikipedia.org/wiki/fund_accounting#Overview Retrieved:2016-1-7.
  • Nonprofit organizations and government agencies have special requirements to show, in financial statements and reports, how money is spent, rather than how much profit was earned. Unlike profit oriented businesses, which use a single set of self-balancing accounts (or general ledger), nonprofits can have more than one general ledger (or fund), depending on their financial reporting requirements. An accountant for such an entity must be able to produce reports detailing the expenditures and revenues for each of the organization's individual funds, and reports that summarize the organization's financial activities across all of its funds.

    A school system, for example, receives a grant from the state to support a new special education initiative, another grant from the federal government for a school lunch program, and an annuity to award teachers working on research projects. At periodic intervals, the school system issues a report to the state about the special education program, a report to a federal agency about the school lunch program, and a report to another authority about the research program. Each of these programs has its own unique reporting requirements, so the school system needs a method to separately identify the related revenues and expenditures. This is done by establishing separate funds, each with its own chart of accounts.

2015

• (Wikipedia, 2015) ⇒ http://en.wikipedia.org/wiki/fund_accounting Retrieved:2015-12-13.
  • Fund accounting is an accounting system emphasizing accountability rather than profitability, used by non-profit organizations and governments. In this system, a fund is a self-balancing set of accounts, segregated for specific purposes in accordance with laws and regulations or special restrictions and limitations.

    The label, fund accounting, has also been applied to investment accounting, portfolio accounting or securities accounting – all synonyms describing the process of accounting for a portfolio of investments such as securities, commodities and/or real estate held in an investment fund such as a mutual fund or hedge fund. Investment accounting, however, is a different system, unrelated to government and nonprofit fund accounting.

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