NPO LECTURE 03 1/6: INVESTMENT INCOME

HM RANA UMAR FAROOQ  The best teacher of CMA USA

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00:00The Jeevachar Party, whatever we have read so far, is nothing but a Muslim silo.

00:07Whatever we have read so far, is nothing but a Muslim silo.

00:30Whatever we have read so far, is nothing but a Muslim silo.

00:50Our next issue is investment income.

01:00If a not-for-profit organization invests, then how do we treat the investment income that comes with it?

01:18If we have invested these funds in the endowment fund.

01:23What did we read in the endowment fund?

01:28We cannot use the principal in the endowment fund.

01:35Only the investment income can be used for that.

01:39We have to keep the principal safe in the endowment fund.

01:42If I have invested in the endowment fund, and if there is an investment income on that, then where will it go directly?

01:51It will go directly to the net assets, and where will it be added?

01:55It will be added to the endowment fund.

01:58So, it will not come on the face of the income and expenditure.

02:01It will not come on the face of the income and expenditure.

02:06But if there is another investment income, then just like any other investment income,

02:15if there is another investment income,

02:22any other investment income with no restriction,

02:35if there is no restriction on it, then where will it go?

02:41It will go to the income and expenditure account.

02:45If there is a restricted fund, then it will also go directly to that fund.

02:50We process it from the income and expenditure.

02:52So, if there is any other investment income, then we will treat it like contributions.

02:59If you have made an investment income, then this is neither a membership subscription,

03:06nor have you joined, nor have you made an investment from the canteen,

03:11nor have you made a concert or an event.

03:16So, this is not of any type.

03:18We had read on the first day, what can be the income?

03:20Contribution, membership fee, or membership subscription.

03:25Apart from this, we had said that there can be an income from an event.

03:28So, whatever list we had made, it did not fall anywhere.

03:32So, what will we deal with it?

03:33Where will we write contribution and membership?

03:36We will write income and expenditure.

03:38But if there is an endowment fund or a restriction,

03:41then we will see its basic treatment.

03:43If there is an endowment fund, then it will not come from income and expenditure,

03:46then membership will be added.

03:47And if there is any other restricted fund,

03:50then if there is a restriction on the incoming income,

03:53that you cannot use this income,

03:55but if you want to use it for a specific purpose,

03:58then it will be added directly to the fund.

04:00If there is no restriction,

04:02then just like contribution,

04:04we will take it directly on whose face?

04:06We will take it on the face of income and expenditure.

04:09Let's see if it is clear or not.

04:30.

04:53Is it clear, friends?

04:55Does anyone have a problem?

04:57Keep in mind that if that fund is investing somewhere,

05:01or if it has given a loan to someone,

05:03then we will have to see which money is in its investment.

05:06If someone has been given a loan from an endowment fund,

05:09and interest income is coming from there,

05:11then that interest income will go directly to the endowment fund.

05:13It will not go on the face of income and expenditure.

05:16Next, we have profit from running an operation.

05:21Profit from running an operation.

05:33What can this be?

05:35It can be a canteen.

05:37It can be a coffee bar.

05:40If we make a profit from this,

05:48then we will take it on our income and expenditure.

05:50And I told you on the first day,

05:52that if they give you the data of a particular canteen,

05:56then what do you have to do separately?

05:58You have to open the working.

06:00You don't have to scribble on the face.

06:02You have to open the working.

06:04You have to write separately on it.

06:06You have to write sales,

06:08you have to write CGS,

06:10you have to write operating expenses.

06:13After operating expenses, the profit that will come,

06:17what do you have to do with that profit?

06:20Income and expenditure.

06:23But remember one thing,

06:28the closing inventory in CGS,

06:32do not forget to write it in SOFP.

06:37It will come in current assets.

06:40And if there are any receivables due to sales,

06:44then they will also come in SOFP as current assets.

06:49The assets of this canteen,

06:52if there is a coffee-making machine in the canteen,

06:57whether it is a coffee-making machine or something else,

07:01then the depreciation on it will come here.

07:04All operating expenses,

07:07operating expenses,

07:09salaries,

07:17salaries,

07:19other expenses, even depreciation.

07:25The equipment,

07:27which asset is being used for the canteen,

07:31its depreciation will be reduced from here.

07:34Its depreciation,

07:37its depreciation will be reduced from there.

07:40Other than this,

07:41apart from the canteen,

07:42if there is a building,

07:43if there is any other equipment,

07:45if there is any other asset,

07:47its depreciation will go on the basis of income and expenditure.

07:50Where will it go?

07:51But where will the depreciation of the canteen go?

07:54It will go to the canteen.

07:55Do not take that base.

07:56All the expenses of the canteen will go here.

07:59But the non-current assets of the canteen,

08:03where will they go?

08:05So, if you are going to run a business, you are going to run it in a way that you are

08:17going to be able to run it in a way that you are going to be able to run it in a way that

08:22you are going to be able to run it in a way that you are going to be able to run it in

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