Why Reserves Don’t Appear on the Face of Charity Accounts
About this episode
In this episode, Aishat explains why reserves are not shown on the face of charity accounts and how they relate to unrestricted funds.
Grab your copy of my book Charity Finance from A - Z Check out ExpensePlus and sign up for a month's free trial and 10% off your first year's subscription, using my referral link http://expenseplus.co.uk/r/AI-BANC In this episode, I respond to a question I hear often in boardrooms when presenting final accounts: “Why aren’t the reserves shown on the face of the accounts?” It’s a fair question, and a healthy one. But answering it requires translating between governance thinking and accounting structure, so that what I do - unpack 'reserves'. This episode is for trustees, chairs, treasurers, CEOs, and anyone responsible for financial oversight who wants to feel more confident reading charity accounts. KEY TAKEAWAY Reserves are not a separate accounting line, they are part of unrestricted funds. Not all unrestricted funds are freely available; some may be designated or tied up in assets. The face of the accounts shows classification and not governance interpretation. Strong boards monitor reserves during the year, not just at year end. Questions Trustees Can Ask (about reserves) How many months of operating costs do those reserves cover? Are we meeting our reserves target? If not…
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