NAS for NPOs in Nepal — Restricted Funds, Reporting and Reconciliation

Record restrictions according to the selected framework, not simply as a memorandum outside the accounts. Assess whether a receipt is a contribution, conditional funding, exchange transaction or another category. The timing of recognition and related liabilities depends on the standard and terms.

An organisation receives NPR 2,000,000 for a specified education project and spends NPR 1,200,000 on eligible activities. The NPR 800,000 bank balance is not automatically unrestricted surplus. Review unfulfilled conditions, the reporting period and recognition rules, then present and disclose the resulting restricted balance or obligation appropriately. A donor expense report must reconcile to the organisation's ledger rather than use a separate unreconciled spreadsheet.

Maintain the exemption certificate and conditions, distinguish taxable activities and preserve evidence for donations and fees. TDS, VAT, payroll and customs obligations need their own analyses. A certificate of exemption from one income-tax treatment does not waive every withholding duty.

Approve project budgets, related-party transactions and asset disposals through the appropriate governance structure. Reconcile programme and administration costs using a documented allocation. Check current SWC procedures and ASB carve-outs before release. The final file should connect the financial statements, donor reports, tax returns and regulatory submissions while showing each distinct legal purpose.

A donor can restrict a grant to a named programme, period or class of expenditure. Record the restriction, approved budget and reporting conditions, then connect each claimed cost to the underlying transaction. An organisation's unrestricted activity should not be mixed into a restricted project simply because the project has an unused balance.

For example, an NGO pays shared office rent from one bank account. A documented allocation identifies the part properly attributable to a funded programme, using an appropriate basis applied consistently. The donor report and financial statements should reconcile, while any difference in presentation or timing is explained. A donor reimbursement decision does not by itself establish the accounting recognition or tax treatment.

ASB's NPO definition includes qualifying Nepal-registered organisations, overseas non-profit organisations operating through required agreements or permits and specified bilateral programme entities. Legal registration and a non-profit objective are relevant, but the reporting-framework conclusion should address the organisation's actual structure and applicable requirements.

NAS for NPOs, SWC reporting, donor returns and tax obligations have distinct purposes. ICAN’s notice dated 2081/05/05 implements the ASB carve-out resolved on 2081/03/27. Under section 6, the core set covers financial position, income and expenditure, reserve movements, cash flows and notes. Donor schedules should still follow the grant agreement and reconcile to the organisation’s accounts. Section 15.2 retains cost less depreciation and impairment for investment property; disclosing fair value is optional. This targeted change does not free restricted money for ordinary spending.

At year-end, reconcile bank accounts, restricted-fund records, advances, commitments, assets and amounts due to suppliers or staff. Review whether grants carry outstanding conditions or repayment exposure. An unspent bank balance can include funds that the organisation cannot use freely.

A programme ends with NPR 400,000 cash remaining and an unpaid supplier invoice. The closing working considers the invoice, any donor restriction and the required return of an unused amount. It does not classify the whole cash balance as an unrestricted surplus. Management approves the final schedules and reconciliations, then prepares the statements and required programme reports from a consistent evidence set.