# UKShowing total returns income on charity SOFA

#### CharityClerk

If, at the start of the financial year, a charity decided to draw down total returns of 5% from its permanent endowment fund that year (based on portfolio value at prior year end)... and received a monthly payment to their cash account from the investment manager on that basis throughout the year... but it was a bad year for investments... so the actual total return was less than the 5% drawn down... how does this appear on the SOFA please?

In this case: the charity received payments from its investment account totalling approx £750k during the year. But the actual income yield (dividends) from investments was only around £300k, and there was a loss on the capital value of the investments. The accountants have put the £300k on the 'Investment income' line of the SOFA, but the remainder of what was drawn down does not appear anywhere in the SOFA, only in the Notes to the Accounts. Surely it should be shown as a transfer from endowment/restricted funds to income/unrestricted funds on the SOFA??

I'm not an accountant, so please forgive me if this is a stupid question. I just need someone to explain it to me! I can't understand how funds that we have physically received into our bank account can be completely omitted from the SOFA??

TIA.

#### Shcoll

If, at the start of the financial year, a charity decided to draw down total returns of 5% from its permanent endowment fund that year (based on portfolio value at prior year end)... and received a monthly payment to their cash account from the investment manager on that basis throughout the year... but it was a bad year for investments... so the actual total return was less than the 5% drawn down... how does this appear on the SOFA please?

In this case: the charity received payments from its investment account totalling approx £750k during the year. But the actual income yield (dividends) from investments was only around £300k, and there was a loss on the capital value of the investments. The accountants have put the £300k on the 'Investment income' line of the SOFA, but the remainder of what was drawn down does not appear anywhere in the SOFA, only in the Notes to the Accounts. Surely it should be shown as a transfer from endowment/restricted funds to income/unrestricted funds on the SOFA??

I'm not an accountant, so please forgive me if this is a stupid question. I just need someone to explain it to me! I can't understand how funds that we have physically received into our bank account can be completely omitted from the SOFA??

TIA.
I assume the accountant did the right thing, so the year to date investment income was \$300K ( using dollar) of which withdrew and deposited less than 5%. So when the year end statement came the Accountant showed \$300K investment income, and the 5% cash received is included in the general cash and the remaining on the \$300K is shown in Receivable.
In conclusion, the less than 5% cash received is included in general cash, \$300K is investment income shown, and the reminder should be in Receivable.

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