The Accumulated Fund
A club's Statement of Financial Position lists its assets and liabilities on a given date. In place of capital, a club uses an accumulated fund. The opening accumulated fund is found like opening capital — the net assets at the start of the year:
Key idea
Opening accumulated fund = Total assets − Total liabilities (at the start of the year). Closing accumulated fund = Opening accumulated fund + Surplus − Deficit.
Example
At the start of the year: equipment RM4,000, cash RM1,500, subscriptions in arrears RM300; subscriptions in advance RM200, creditors RM400. Opening accumulated fund = (4,000 + 1,500 + 300) − (200 + 400) = 5,800 − 600 = RM5,200. If the year's surplus is RM2,200, the closing accumulated fund = 5,200 + 2,200 = RM7,400.
Layout of the Statement
Non-current assets (e.g. equipment, less accumulated depreciation) are listed first, followed by current assets (closing arrears, inventory, cash). Current liabilities include closing subscriptions in advance and creditors.
| Accumulated Fund section | |
| Opening accumulated fund | 5,200 |
| Add: Surplus | 2,200 |
| Closing accumulated fund | 7,400 |
A Simple Statement Example
The top of the statement lists non-current assets such as buildings and equipment at net book value, that is cost less accumulated depreciation. Then current assets such as inventory, subscriptions in arrears and the bank balance are totalled. Current liabilities such as subscriptions in advance and creditors are deducted to give net assets. This net asset total must equal the closing accumulated fund, proving that the statement balances. Accurate calculation of the opening accumulated fund is vital, because any error in it will make the statement fail to balance.
Remember
Closing arrears are a current asset; closing prepaid subscriptions are a current liability. A surplus is added to, and a deficit deducted from, the accumulated fund.