What is Capital Fund? How is it calculated?

Capital fund is the excess of NPOs' assets over its liabilities. In other words, the excess of assets over the liabilities for a profit earning organisation is termed as capital and the same for an NPO is termed as capital fund. Any surplus or deficit ascertained from Income and Expenditure account is added to (deducted from) the capital fund. It is also termed as Accumulated Fund.

Calculation of Capital Fund

Capital Fund at the beginning of the year

 

**

Add: Surplus from Income and Expenditure Account

**

 

Add: Subscription Amount (Capitalised amount)

**

 

Add: Life membership fee.

**

**

Less: Deficit from Income and Expenditure Account

 

**

Capital Fund at the end of the year

 

***

 

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