Content Standard 15.5

Statement of Financial Position of Clubs and Societies

Penyata Kedudukan Kewangan Kelab dan Persatuan

One-hour paid trial · Same-day reply · from RM50/hr

Explanation

Content Standard 15.5 focuses on preparing the Statement of Financial Position (Penyata Kedudukan Kewangan) for clubs and societies, which are non-profit organisations. The core concept in this standard is the Accumulated Fund (Dana Terkumpul). The Accumulated Fund is the club's accumulated capital, representing the net worth of the club on a given date, that is, the difference between total assets and total liabilities. It is built up from the surpluses (lebihan) of income over expenditure since the club was formed. In the club's Statement of Financial Position, the Accumulated Fund plays the same role as Owner's Equity or Capital in a sole proprietorship, showing the source of financing for the club's assets.

To calculate the Accumulated Fund at the beginning of the period, students prepare a statement of assets and liabilities as at the start of the year. The formula is: Opening Accumulated Fund = Total Assets (opening) minus Total Liabilities (opening). Common assets include furniture, sports equipment, inventory, opening subscriptions in arrears, bank and cash balances, while liabilities include creditors, opening subscriptions in advance and accrued expenses. The closing Accumulated Fund is then found by adding the surplus or subtracting the deficit for the period: Closing Accumulated Fund = Opening Accumulated Fund plus Surplus (or minus Deficit). This surplus or deficit comes from the Income and Expenditure Account prepared earlier.

The Statement of Financial Position of a club follows the standard format. The top section lists Non-Current Assets at cost, less accumulated depreciation to give net book value. This is followed by Current Assets such as inventory, subscriptions in arrears, bank and cash. Then Current Liabilities such as creditors, subscriptions in advance and accrued expenses are deducted to give net working capital, and Non-Current Liabilities such as loans are deducted if any. The bottom 'Financed by' section shows the opening Accumulated Fund, plus the surplus or minus the deficit for the current period, together with any special fund. The total of net assets must equal the total of the financing section.

Several club-specific items must be treated correctly. Subscriptions in arrears, that is, fees that should have been received but have not yet been paid by members, are treated as a Current Asset because they are amounts owed by members to the club. Subscriptions in advance, that is, fees paid early for a future period, are treated as a Current Liability because the club still owes membership service to those members. Special funds such as a Building Fund (Tabung Pembinaan) or a Charity Fund (Tabung Amal) are usually kept separate from the Accumulated Fund and shown as a distinct line in the financing section, because that money is earmarked for a specific purpose.

This standard also requires students to distinguish the Accumulated Fund from Owner's Equity. The Accumulated Fund is used by non-profit clubs and societies, while Owner's Equity is used by profit-oriented businesses. The Accumulated Fund increases with a surplus (when income exceeds expenditure) and decreases with a deficit, whereas Owner's Equity increases with net profit and decreases with net loss. A club has no owner's drawings account because the club is not owned by one individual; instead it may pay an honorarium to officers. The main sources of the Accumulated Fund are members' subscriptions, donations and club activities, unlike business capital which comes from the owner's investment.

Worked examples

Calculating the opening Accumulated Fund (Seri Indah Sports Club)

On 1 January 2025, Seri Indah Sports Club had the following assets and liabilities: Sports equipment RM8,000; Club shop inventory RM1,200; Subscriptions in arrears RM300; Bank balance RM4,500; Creditors RM700; Subscriptions in advance RM200.

Total Assets = RM8,000 + RM1,200 + RM300 + RM4,500 = RM14,000. Total Liabilities = RM700 + RM200 = RM900.

Accumulated Fund (1 January 2025) = Total Assets - Total Liabilities = RM14,000 - RM900 = RM13,100.

This figure of RM13,100 becomes the opening balance of the Accumulated Fund in the year-end Statement of Financial Position.

Preparing the Statement of Financial Position (Seri Indah Sports Club)

On 31 December 2025, the club's Income and Expenditure Account showed a surplus of RM2,400. Balances: Sports equipment (cost) RM8,000, accumulated depreciation RM1,600; Inventory RM1,500; Subscriptions in arrears RM450; Bank RM7,950; Creditors RM500; Subscriptions in advance RM300.

Non-Current Assets: Sports equipment RM8,000 - accumulated depreciation RM1,600 = net book value RM6,400.

Current Assets: Inventory RM1,500 + Subscriptions in arrears RM450 + Bank RM7,950 = RM9,900. Less Current Liabilities: Creditors RM500 + Subscriptions in advance RM300 = RM800. Net working capital = RM9,900 - RM800 = RM9,100.

Total net assets = RM6,400 + RM9,100 = RM15,500.

Financed by: Accumulated Fund RM13,100 + Surplus RM2,400 = RM15,500. Both sides total RM15,500, so the statement balances.

Treatment of subscriptions in arrears and in advance

Seni Warna Club has 40 members paying RM50 per year, so the amount due is RM2,000. As at 31 December 2025, only RM1,850 was received. This means subscriptions in arrears (unpaid) = RM2,000 - RM1,850 = RM150.

The subscriptions in arrears of RM150 are shown as a Current Asset in the Statement of Financial Position.

If 3 members paid their 2026 subscriptions early (3 x RM50 = RM150), then subscriptions in advance of RM150 are shown as a Current Liability because they are next year's income.

Practice

Damai Recreation Club has the following information on 1 January 2025: Furniture RM6,000; Inventory RM800; Subscriptions in arrears RM250; Bank RM3,000; Creditors RM550; Subscriptions in advance RM100. Calculate the Accumulated Fund on 1 January 2025.

Answer: Total Assets = Furniture RM6,000 + Inventory RM800 + Subscriptions in arrears RM250 + Bank RM3,000 = RM10,050. Total Liabilities = Creditors RM550 + Subscriptions in advance RM100 = RM650. Accumulated Fund = Total Assets - Total Liabilities = RM10,050 - RM650 = RM9,400.

Maju Youth Club's Accumulated Fund on 1 January 2025 is RM12,000. At year-end, the Income and Expenditure Account shows a deficit of RM1,500. Calculate the Accumulated Fund on 31 December 2025 and explain how it is shown in the Statement of Financial Position.

Answer: Closing Accumulated Fund = Opening Accumulated Fund - Deficit = RM12,000 - RM1,500 = RM10,500. In the 'Financed by' section of the Statement of Financial Position, it is shown as: Accumulated Fund RM12,000, less Deficit RM1,500, giving a closing balance of RM10,500. The deficit is deducted because expenditure exceeding income has reduced the club's accumulated fund.

State the accounting treatment of the following items in a club's Statement of Financial Position as at 31 December 2025: (i) Subscriptions in arrears RM400; (ii) Subscriptions in advance RM250; (iii) Hall Building Fund RM5,000.

Answer: (i) Subscriptions in arrears RM400: treated as a Current Asset because it is subscription not yet received from members (amounts owed by members to the club). (ii) Subscriptions in advance RM250: treated as a Current Liability because it is subscription paid early for next year (the club still owes membership service). (iii) Hall Building Fund RM5,000: shown separately in the 'Financed by' section because it is a special fund earmarked for a specific purpose, separate from the ordinary Accumulated Fund.

Explain TWO differences between a club's Accumulated Fund and the Owner's Equity of a sole proprietorship.

Answer: First, in terms of motive: the Accumulated Fund is used by a non-profit club, whereas Owner's Equity is used by a profit-oriented business. Second, in terms of what increases and decreases it: the Accumulated Fund increases with a surplus (income over expenditure) and decreases with a deficit, whereas Owner's Equity increases with net profit and decreases with net loss and owner's drawings. In addition, a club has no owner's drawings account because it is not owned by an individual.

Exam tips

Key terms

Accumulated Fund (Dana Terkumpul): The club's accumulated capital representing its net worth, that is total assets less total liabilities.
Surplus (Lebihan): The balance when income exceeds expenditure for a period; it increases the Accumulated Fund.
Subscriptions in arrears (Yuran tertunggak): Fees that should have been received but are still unpaid by members; treated as a Current Asset.
Subscriptions in advance (Yuran terdahulu): Fees paid early for a future period; treated as a Current Liability.

Source: DSKP KSSM Prinsip Perakaunan Tingkatan 5

Need help with Statement of Financial Position of Clubs and Societies?