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In the following examples, we've set up our beneficiary accounts as equity accounts. But if you've set up your beneficiary accounts as a liability to the trust, you can still use the examples to report correctly in Statutory Reporter.
Setting up the Chart of Accounts
Open the AccountRight or Essentials company file and set up accounts in the Equity tab of the Account List for each beneficiary. For example:
If the trust has made a profit over the financial year, use a journal to distribute the profit to each receiving beneficiary's share of profit account.
If you're using AccountRight version 2015.4 or later, to post a journal to the Share of Profit accounts, make sure that Entity Type in AccountRight's Profit/Loss Distribution window is set to Company.
In Client Accounting, you only need to do one journal to distribute the profit and raise a liability for Unpaid Present Entitlements (UPE) at year end.
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Where the trust has made a loss during the year, you won't need to process any journal at the end of the year to record the accumulated loss. Where the trust makes a profit in a future year, you will only need to perform a distribution journal for the net profit after accuulated losses have been deducted.
Reporting Beneficiary Funds
Before you produce any reports, you'll need to map your accounts to the appropriate account group. To report profit and profit distributed correctly, we recommend the following setup:
|All Beneficiary Accounts||Balance Sheet > Assets and Liabilities > Assets > Current Assets > Unpaid Present Entitlements (DR)|
Balance Sheet > Assets and Liabilities > Liabilities > Current Liabilities > Unpaid Present Entitlements (CR)
|Distribution to Beneficiaries||Balance Sheet > Equity > Retained Earnings > Current Year Earnings|
Profit and Loss Statement > Appropriation > Other
|Retained Earnings||Balance Sheet > Equity > Retained Earnings > Retained Earnings|
|Current Year Earnings||Balance Sheet > Equity > Current Year Earnings > Current Year Earnings|
Assuming that all profits made by the Trust are distributed to beneficiaries, the bottom-line figure on the Income Statement will be $0 and the Current year earnings in the Balance Sheet will also have a zero balance. All amounts owing to beneficiaries including the Share of Profit for the year appears in Unpaid Present Entitlements on the Balance Sheet.