 In this presentation, we're going to record a transaction related to a donor pledge that has been restricted for the construction project. In other words, there's a construction project that's going to be taking place with the not-for-profit organization and the pledge that is being made is being restricted for use in the construction project. Get ready because here we go with Aplos. Here we are on our not-for-profit organization dashboard. We're going to go on down to excel to see what our objective will be. We're going to be moving on over to tab number six. So we're on tab number six. Let's go take a look at our items over here, number four. We're on number four, tab six, number four. And then we have the donor pledge for construction project. So the project life is going to be five years. Project start dates, two years from now. Discounted value pledge 96-160. All right. What does that mean? That means that someone's going to give us a pledge. So we're imagining a scenario where we're going to get a pledge. However, that pledge is going to be restricted to a construction project. So we then have to record the fact that if there's a specific restriction for it, it's going to be a long-term construction project. That construction project isn't going to start for two years from today and it will take five years to do. So therefore, we either aren't going to get the pledge and or aren't going to be able to use it until that time period, which is two years from today. So that means that we need to record on the books. We need to record that this person says they're going to give us money. So we want to track that so that we can make sure that we do our best to collect on it. But we also want to record the fact that if we're going to report this on the financials on the balance sheet, we're going to show it as a restricted item. But we also want to show that it's not really valued at the 109-100 restricted item, but rather at its discounted value due to the time value of money. So considering the project won't start for two years, we're going to discount the value and say it's only worth 96-160 as of today. So I'm not going to get into the time value of money or how you get into that discounting item, but that's the idea that we'll have here. And then of course, that difference, we're going to have to record that. So how are we going to record that in terms of a journal entry? So let's look at the journal entry and then we'll think about how to enter this into our system and app lose. So obviously, we have the contribution revenue receivable, contribution receivable. That's going to be an asset account. It's going to go up. We expect to collect the entire 109-100. Although we expect to collect that entire amount, it's not going to be for two years and or we can't use it for two years. Therefore, we're only going to be recording the contributions with donor restrictions, which is basically a revenue account, but restricted of the 96-160. So revenue goes up by that. There's going to be a difference then of the 12,940. So we're going to record that to an account called discount on contributions receivable. What does that look like on our chart of accounts here? We got the receivable. The receivable is going to go up. People owe us money. So we're going to show that. And then we're going to have this account that's similar to an allowance account, a contra asset account. This is going to tell our reader, Hey, look, this is how much we expect to receive total on receivables minus what the contra account is going to be the 12,940 in this case. And that will give us then the net receivables. And then if we scroll down below, we've got the contributions with donor restrictions down here. That's basically increasing a type of revenue account, revenue accounts or the contribution accounts being broken out between those with and without restrictions with two accounts here. However, when we bring it over to our statement of activities, statement of activities down below, we're going to break that out with the two columns restricted and unrestricted. We could have one account and break it out by column rather than two separate accounts. So that's going to be our objective. Let's go on back to Aplos and see if we can apply that objective here. So we're going to go back on into our system, we're going to go into the accounting information, we'll go to the accounting drop down and then we want to go to actually not the accounts drop down the transactions drop down. And then let's go to the accounts receivable. So transactions drop down accounts receivable. All right, so here's going to be our transaction form. We're going to start off with our customer. I'm just going to make another customer pleasure to or pleasure construction project. So this is their name, obviously, it's not a very good name, but that's going to be the name that we're going to be using for the pledging project. Again, we would want to set this up in our system with more information that than that by going to the people up top. So we get more information in there, but I'm going to enter the minimum here. We're going to say the memo, let's keep it at the pledge. We're going to say that the date of this thing or actually the invoice number note is going to be populated for us will then enter the date of the invoice, which is going to be back on January 7. So January 7, the terms, let's make the terms that net 15 once again, that gives us the due date of 122. So that's when we expect to pay it. Now, actually, it's not net 15. This one is that really kind of strange one. I'll say no terms here, and we actually don't expect it to be paid till till some time out out past that. So let's say, I mean, let's just make this another year 22. We're going to do something like that. We don't expect to get paid for a while on it, or we don't expect to be able to use it one or the other. So in any case, we're going to go back to the amount then. And then we're going to say that the amount going to go back to the left and scroll back up top, and we're going to say the amount 109. So I'm going to say the amount is going to be that 109 100 109 100. And then the remaining balance is that as well. And then we might say this is for a long term construction project. And then we might say that it's not, you know, we might not get a pay to whatever the terms are that they're agreeing to pay us in. And then we're going to say that we have the accounts receivable, and it's going to we're going to put this into the contributions restricted category. So it's going to be restricted. And then we're going to say it's going to be restricted here. So that looks good. Comments we might want to put, you know, it's a long term construction, but I'm not going to do it. The percentage that we're going to put here will be, and actually let's populate the amount. So I'm going to say the amount is going to be for that 96 160. So 96 160, not the entire amount. 96 160. And notice that puts the percentage in for us. So you can you can enter either one. If we oftentimes it's useful to use the percentage if we're breaking out the, you know, some expenses sometimes or something like that, but or you can put the amount and it'll break out the expense for you. So then we have the tags. So we're not going to have or yet we will have a restricted category here. So we got a restricted tag. We're going to have to add another restriction because now we have another restricted category we're going to be using for this long term project. So I'm going to go back up top I'm going to add another restricted category. I'm going to right click on this tab up top duplicate. Note how we can kind of do this as we go. Again, this is a great thing to have with with online kind of software to have multiple tabs open. I highly recommend getting used to it. And then we're going to go to the fund accounting. We're going to be going to the accounting accounts drop down. We're going to be taking a look at the tags. So within the tags set in we want to go to the restricted tags. And then in the restricted tags, I'm going to add a long term project. So I'm going to hit the plus button and let's make the number let's say 650 and make it a long term project. Now obviously in practice you you want to make that more specific you know what which project you know what project. So there's a fairly broad name here but it's going to be the long term project in our generic problem here. So we're going to add that long term project 650. So there we have it. And then let's go back to the first tab and then now I can put 650 in this restricted item. So 650 and there it is. There's the long term project has now appeared. And let's add another row. So we're going to add another row now. Now this one's going to go into that funny new account. We have a funny new account which is going to be the discount on construction on contributions receivable that contra revenue account. So that one is almost certainly not yet been added to our chart of accounts. So what I'm going to do is I'm going to copy this. What is it and then we're going to add it. So we're going to do a similar type of thing. I'm going to go back on over. I'm going to go back to this other tab now this new tab that we set up. So we're going to use this now to set up our account that we're going to have to use. I'm going to go to the fund accounting. We're going to go to the accounts. We're going to go down down to the account list within the account list. We want the asset type of account. So it's going to be in the asset type of account. It's going to be in the current asset area. Then we want it like close to the receivable pretty close. So it's going to be 11 let's say 11 0 5 say 11 0 5 11 0 5 and then the type is going to be I don't need to register. I don't just none is fine. And then I'm going to paste the name which is that horribly long name that we're taking from the sheet there discount on contributions receivable and activity. So I'm going to keep the activity at will keep it there. And then we're going to say that that's going to be it. So I'll save that and that'll pick it up to the 11 0 5. And actually I went back in here like I went back in by clicking on it again. And I do want to change this activity not to catch it's not a cash account should be in the operating. So these are these are for the statement of cash flows. So this is going to be another current asset. So we'll put it into the operating for the statement of cash flows. And if you're confused about where exactly to put those you can kind of copy the same segment. So if I if I go up here and I went here and and I could see it here and then use the same one which I totally knew. But then as you know I got a little nervous from recording here. So I checked it and then I went back down. But that makes sense because this is the statement of cash flows operating that makes sense. So we're going to then say save. And then let's go back on over 11 0 5 is the account. So we're going to go back on over here. We're looking for 11 0 5 11 0 5. There it is. We've just created it. And then that's going to be restricted. We'll keep it there. And then I'm getting I'm not going to go to the percent but to the other one. And the amounts now is going to be the amount is going to be 12 9 4 0 12 9 4 0 1 2 9 4 4 0. There we have that 11.86 percent populating for us. And then we will now you could put the tag here. You don't really need to like 650 if you so choose. But we're really concerned with the tag on in essence the income statement line item. This is going to be a balance sheet statement line item. So I'm not as concerned with the tag on the balance sheet line item. Now note that these two amounts here should be adding up to the amount up here. What's this going to do accounts receivable then going up by the 109 100 the revenue account but restricted revenue going up by that 96 160. And then that contra asset account which is going up in a contra asset he kind of way which means it's going to be a crime. You know a negative asset will go will that will happen as well. So we're going to say submit submit that and see if it gives me any kind of red error sign or anything. No looks good. So let's go let's go then to the second tab again. Let's open up our reports. We're going to go to the reports on the right hand side opening up our reports. We're going to look at the balance sheet by fund. So we'll open up the good old balance sheet by fund. Let's go back to the tap the left and then right click on it duplicate it. And then we're going to open up the old income statement to we're going to go to the reports. So let's go to the reports. And then let's go to the income statement by fund as well. Then I'm going to go back to the balance sheet. We're going to change our dates. We're going to select the drop down on the dates. We're going to go back on over to Jan you worry January 31st. So there we have that. And then I'm going to go to the drop down up top. I like to have the total column here for us. So I'm going to select please show me the total column. So now we've got the total column notice that again the balance sheet I'm not as worried about the breakout of the restricted and unrestricted. I'm mainly concerned down here that we have this allocation down here in the equity section. But I'm going to keep running. I'm going to run this report and because it is you know it's a it's something different. It's nice that you can do that. It's different than what you could typically do in other other software. But in any case we're going to say that here is our accounts receivable if we were to select that item. Then we have now our our invoice there. And here's the new invoice we selected. If we if we were to select it we would then go to the data input and we can drill down on it going back to our information there. Then we're going to go to the second tab where we have our income statement. We're going to make this for the time range. I'm going to say year to date because that's the easiest thing to do and might as well do the easiest thing if it doesn't matter anyways like if it doesn't hurt anything. And then I'm going to go down to the total column. Let's add the report layout total. So we have the total column. So there it is. And then this went into went into the restricted items. So notice again we have the restricted and unrestricted still broken out by category but now also broken out by by the category in this format by column and by row. So and again if you wanted to present this to someone else and you don't want this breakout here and you just want it to be the construction contributions and then broken out in this format just by row by column then you could use the sub accounts and we might take a look at some more formatting of the reports. We will format the reports more in a future presentation and consider some options such as those. If you were to go into this restricted item here then once again you could you could get your detail. Notice that we have multiple items that are now restricted and there's multiple different restrictions to them. Therefore we need to be running our report. I'm going to go back. We need to run our report because the next question we can imagine being asked if we were to give this to someone as they say okay there you got the 363 160 in the restricted items well you know what are the restrict what does that mean what kind of restrictions we talking about here. So if we know that we're going to go back to the first tab and then say all right we got our report let's run our report for the restricted items by going to the reports on the right and then we're going to scroll down to the tags and we want the restricted income statement or the income statement that's under the restricted tags report section and then I'm going to be running this for the year to date this year to date. So there we have that and then so that so that's it so there's our restrictions so now we have the contributions restricted income being broken out now but the time restriction the government grant restriction now our long-term project there's our total restricted items that 363 160 if we go back to our income statement is going to be tying out here with the 363 160. So that's going to be it for now let's get out of here.