This portion of the book will provide details related to the fund balance on the balance sheet.

The fund balance (equity) is essentially the difference between assets and liabilities. In general, it is the balance remaining after assets have been used to satisfy outstanding liabilities. At Indiana University, very little activity occurs directly within fund balance (equity) accounts and the balance is comprised of the prior existing fund balance (equity) and the period’s net income.The fund balance is made up of three classifications: net investment in capital assets, restricted funds, and unrestricted funds. In general, no entries should be posted directly to fund balance accounts.