Unrestricted Fund Balance
Statement of Fund Balance is one of the financial statement which is used amount the non-profit organization and government. It shows the cash balance which remains after deducting all expenses from the fund receive or donation. As these types of entities are not profit-seeking, they do not have any profit and loss statement. The objective of this report to show the ending fund balance which is the difference between an entity’s assets and liabilities.
In simple words, fund balance is the amount of cash that remains in the nonprofit organization or government. As these entities are using a cash basis, after deducting expenses from revenue, we will get the fund balance which equals to remain cash.
Some fund in the entity is not available for any use as it is restricted for any particular projects or work. It is called a restricted fund, the government cannot spend but keep it for a particular work in the future.
As the name suggests, an Unrestricted fund balance is the amount of fund which not restricted. It is the portion of the fund which government can spend on any works as long as it complies with the GASB (Government Accounting Standard Board).
Even the government can spend unrestricted funds on any work, they should design a formal policy on the level of unrestricted funds to be used to ensure transparency. It should set the minimum level of restricted funds for any emergency.
Type of Government Fund
- General Fund: it is the fund used for admin expenses which the government can use for such expense which is not reported in other fund reports.
- Special Revenue Fund: It is the revenue received from specific tax or other services that is not the major capital project.
- Debt Service Fund: It is the fund which specifically use to pay both principal and interest of government debt.
- Capital Project Fund: It is the fund ready to use for construction, acquisition, and build capital infrastructure such as road, bridge, building and
- Permanence Fund: It is the fund used to invest to generate income, it is not supposed to spend this fund.