Non Profit Adjusting Entries

Nov 22, 2018
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Hi everyone, and thanks in advance for your help!
So I'm working for an American Non Profit Organisation that operates in Israel,
The fiscal year for the organisation is an academic one, which means that it starts on Sept and ends by end of August the following year.
I know that the Temporarily Restricted Fund can be used to account for contributions received from a certain Donor but not yet used 100%, like if we received $10,000 and only used $8,000, so the $2,000 shall be recorded at the end of August (year end) in the Temporarily Restricted Fund and in the following year shall be recognized as Revenue (Resources Released From Restriction)..
My question is, what if we had the opposite case, like what if the total grant was $10,000 (Grant Period is from November to October the following year), and we received only $8,000 in the first year and promised the remaining amount of $2,000 the following year (After closing the grant -so after month of October the following year), BUT the expenses allocated to that grant in the first year were $9,000 which means there were more expenses than the amount we received by $1,000, so in that case, what shall I record at the end of the first year to account for this?? I guess I can't record any receivables at year end because the $2,000 will only be recognized after closing the grant on October..
(If I didn't record anything at the end of the first year, then the extra expenses shall be closed to the net assets and in the following year the expenses under that grant shall be understated by $1,000)

Thanks again for your help!


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