Question

define legacy . Explain it's treatment while preparing financial statements of " Not- for- profit- organization​

Answer 1

• Legacy: It is the amount which a Not For Profit Organization will receive as per will of a deceased person. It is shown on the debit side of receipts and payments account. It should be capitalized being an item of non-recurring nature and should be shown on the liabilities side of the Balance Sheet.

Answer 2

The sum received by a Non-profit Organization in response to a person's will is known as a legacy. Its treatment while preparing financial statements for Not-for-profit organization​s can be explained by the following:

• A non-profit organization receives a legacy when a deceased person leaves money to them in accordance with their will.
• It can be seen on the balance sheet and income side of the Invoice and Direct debit Account and is immediately added to the equity found or pension fund on the balance sheet.
• On the income and expenditure account's income side, it is possible to treat a minimal amount of inheritance money as income. 
• If the deceased person specified how his legacy should be used. After that, it is identified as an equity invoice and added to the liabilities section of the balance sheet under the heading Specific legacy.

For more information on Legacy and Non-Profit Organizations, refer to these links:

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