How to Perform a Month-End Net Asset Reconciliation for an NGO
Verifying that the three net asset classes (Unrestricted, Temporarily Restricted, Permanently Restricted) balance.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Net Assets Without Donor Restrictions | Equity | - | - |
| Net Assets With Donor Restrictions (Temporary) | Equity | - | - |
| Net Assets With Donor Restrictions (Permanent) | Equity | - | - |
💡 Accountant's Note
This is a reconciliation check entry, not a transaction. The CFO or Finance Manager verifies that the sum of all three net asset classes equals total assets minus total liabilities at month-end.
Practitioner & Systems Framework
💻 ERP Architecture
Generate a Trial Balance and a Statement of Financial Position. Ensure that the retained earnings/net assets carry-forward plus current year surplus/deficit across all fund codes mathematically equals total Assets minus total Liabilities. Resolve any out-of-balance fund codes immediately.
⚠️ Audit Flags
Fund accounting systems can easily become unbalanced if an inter-fund transfer is one-sided or a revenue/expense is booked without a fund code. Auditors review the net asset roll-forward as a primary test of system integrity.
📄 Required Documentation
Month-end Trial Balance by fund, Statement of Financial Position, and Net Asset roll-forward schedule.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.