Glossary
Fund Accounting

Fund Statement Footnote

By: Alec Hollingsworth
Updated:  
June 16, 2025

DEFINITION:

A supplemental note in fund statements explaining details, restrictions, or policies related to specific funds in a nonprofit’s accounting.
A Fund Statement Footnote is a supplemental note included in a nonprofit’s fund financial statements, providing detailed explanations or disclosures about specific funds. These footnotes clarify the accounting policies, restrictions, commitments, or contingencies relating to individual funds, enhancing transparency for stakeholders. They may address donor-imposed restrictions, describe how net assets are classified, or explain significant transactions affecting a fund's balance. Fund statement footnotes help readers, such as board members, auditors, and donors, fully understand the context and implications of the reported figures. Properly prepared footnotes ensure compliance with accounting standards, support transparency, and facilitate informed decision-making by clarifying complex or ambiguous data presented in the main statements.

Key Takeaways

  • Clarifies fund restrictions and policies
  • Enhances transparency in financial reporting
  • Supports compliance with accounting standards
  • Helps stakeholders interpret fund data

Why It Matters

Footnotes provide crucial context and transparency for fund balances and restrictions.

Real World Example

A nonprofit receives a grant from a foundation specifically for youth programs. In its annual financial statements, the organization includes a fund statement footnote describing the donor-imposed restriction: the grant funds may only be used for program expenses benefiting youth under 18. The note also explains the method for allocating shared administrative costs and any unspent funds' carryover to the next fiscal year. This footnote ensures that board members, auditors, and the public clearly understand how the grant is managed and reported, and reassures the donor that their intentions are being honored.

How Aplos Helps

In Aplos, fund statement footnotes can be added or referenced within financial reports to provide additional context about fund activity, restrictions, or accounting methods. This ensures that reports generated in Aplos are comprehensive, compliant, and transparent for all stakeholders reviewing your nonprofit’s finances.
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Frequently Asked Questions

What is a fund statement footnote?

It is a disclosure in a nonprofit's fund financial statements that explains fund restrictions, accounting policies, or significant transactions.

Why are fund statement footnotes important?

They enhance transparency, help stakeholders understand fund balances, and ensure compliance with accounting standards.

How do I add footnotes to fund statements in Aplos?

Aplos allows users to add custom notes or references to reports, ensuring that footnotes can be included for clarity and compliance.

Who uses fund statement footnotes?

Board members, auditors, donors, and financial reviewers rely on these notes to interpret and verify reported fund information.

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