Restricted grant funds
Restrictions can define eligible activities, costs, timing, reporting or repayment obligations. Read the grant agreement and relevant requirements rather than infer that every restriction has the same accounting or legal effect. Funds can be available in cash while unavailable for general spending. This meaning differs from a committed credit facility, which concerns a lender’s contractual funding obligation. A cash budget should distinguish available grant cash from funds that can be used freely for ordinary operating payments.
Worked example
A grant provides$50,000 for approved training. The recipient cannot assume it may use the cash for unrelated inventory merely because the money is in its bank account; it checks eligibility and conditions.
Common mistake
Merging earmarked grants with committed bank facilities or assuming receipt proves all grant conditions have been satisfied.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FM | Supporting | September 2026–June 2027 |