Since a Not for Profit concern has no owner's Capital account, its Capital Fund on a given date is always found the same way — as the balancing figure of its Balance Sheet on that date.

Total Assets of Junior Sports Club as on 1st April, 2023 (Building Rs 50,000 + Furniture Rs 10,000 + Investments Rs 20,000 + Cash in hand Rs 5,000 + Subscription outstanding Rs 2,000) come to Rs 87,000. Total outside liabilities (Subscription received in advance Rs 1,000 + Outstanding Expenses Rs 1,500) come to Rs 2,500. Capital Fund is the difference between the two.

The Capital Fund of a Not for Profit concern on any date is always calculated as: Total Assets on that date − Total outside Liabilities on that date.

Step 1 — Total Assets as on 1st April, 2023

Building Rs 50,000 + Furniture Rs 10,000 + Investments Rs 20,000 + Cash in hand Rs 5,000 + Subscription outstanding Rs 2,000 = Rs 87,000

Step 2 — Total outside Liabilities as on 1st April, 2023

Subscription received in advance Rs 1,000 + Outstanding Expenses Rs 1,500 = Rs 2,500

Step 3 — Capital Fund

Capital Fund = Total Assets − Total outside Liabilities = Rs 87,000 − Rs 2,500 = Rs 84,500

This figure would appear as the balancing item on the liabilities side of Junior Sports Club's Balance Sheet as on 1st April, 2023, and would be carried forward as the opening Capital Fund for the following year, to which that year's Surplus (or Deficit) is later added (or deducted).

Capital Fund can equally be thought of as the 'net worth' of the concern on that date — precisely the figure a trading concern would call Capital. It always equals Total Assets minus Total outside Liabilities, whether or not a formal Balance Sheet is actually drawn up to find it.

A frequent error is forgetting to deduct the outside liabilities (subscription received in advance, outstanding expenses) altogether, and simply totalling the assets as the Capital Fund — Capital Fund is a NET figure, assets minus liabilities, exactly like Capital in a trading concern.