assets on balance sheet

Started by FrankD2 • 6 replies • 2167 views

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FrankD2 (New Jersey)
Posts: 58

Posted:

I WOULD LIKE TO KNOW HOW THE CLUB HOUSE AND OTHER ASSETS
ARE RECORDED ON THE BALANCE SHEET WHEN THE DEVELOPER TURNS THEM OVER TO THE HOA. ARE THEY DEPRECIATED? RECOREDE AT
MARKET VALUE? OR NOT RECORDED AT ALL

GeraldT1 (<Not Specified>)
Posts: 519

Posted:

FrankD2,

What state you are in?

FrankD2 (New Jersey)
Posts: 58

Posted:

I AMIN THE STAT OF NEW JERSEY

FrankD2 (New Jersey)
Posts: 58

Posted:

I AMIN THE STAT OF NEW JERSEY

GeraldT1 (<Not Specified>)
Posts: 519

Posted:

FrankD2,

The clubhouse is an asset, yes. It is an improvement to the Common Property and belongs to the Homeowner's Association. It may even be recorded as such in the POS Declaration. The Developer was part of that HOA before, during, and probably for a brief period of time after, homes were constructed. I've consulted with my CFO, and a financial person, both concur there is nothing to depreciate or record on a balance sheet regarding the clubhouse. The same would go for other improvements such as a gate, and gatehouse.

The HOA is probably a non-profit or not for profit organization. You probably don't pay real estate taxes on the clubhouse.

Best of success!!
GeraldT1
NNJ

PatrickH (California)
Posts: 204

Posted:

Hi Frank,

I'm not an accountant, but was the Treasurer of my HOA for six years. We didn't record our property on the balance sheet. We own the streets, sidewalks, streetlights, pool, tennis courts, clubhouse, etc., but they were never listed on the balance sheet.

The balance sheet is more of a financial accounting document, it should have all your financial assets such as checking accounts, money market funds and other investement accounts listed along with any financial liabilities.

Check with a local accountant, but I don't think you need to list every piece of common property on the balance sheet.

RogerB (Colorado)
Posts: 5,067

Posted:

Posted By FrankD2 on 12/19/2006 12:44 PM

I WOULD LIKE TO KNOW HOW THE CLUB HOUSE AND OTHER ASSETS ARE RECORDED ON THE BALANCE SHEET WHEN THE DEVELOPER TURNS THEM OVER TO THE HOA. ARE THEY DEPRECIATED? RECOREDE AT MARKET VALUE? OR NOT RECORDED AT ALL

If you are required to use GAAP these should on the Balance Sheet according to our accountant. Certain capital investment items are recorded at current depreciated value and we depreciate them annually. Meanwhile, this is not usually needed or used in the computation of HOA taxes.

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