Balance Sheet - Land Assets

Our incorporated non-profit homeowners Association owns common area lands by virtue of recorded Deeds from the original developer, on which are located improvements such as streets, sidewalks, pool, pool house/office, and tennis courts. Our balance sheet asset format reflects only cash items, and fully depreciated buildings at $0 value (pool house/office only). The common area lands and improvements are listed on the county tax rolls with a small nominal value and annual property taxes are paid by the Association. Generally land is considered an non-depreciable asset in corporate accounting. Should the common area land be listed as an asset on our balance sheet, likewise should all improvements including pool, streets, etc. be listed be listed as an asset? Does anyone have a reference for accounting rule guidance? Apart from an expensive formal commercial land appraisal, how would the association arrive at a value for the land assets? One local appraiser said that he could argue that the common areas had no appraisal value since the lands and improvements were encumbered by the right of use of the association members.

Agree in principle with your comment, but our local Assessor does assess the land a nominal value and we do pay a small amount of taxes. Other common interest developments in our county also pay taxes on lands owned. One point of concern is that if the land is not listed as an asset, property owners and prospective property owners may not be aware that the Association, of which they are a part of, does own land and improvments which have maintenance costs and potential liability. The question is, does the balance sheet represent full disclosure without disclosing all assets including land? There is more than likely a generally accepted accounting rule on this. Any accountants with HOA experience out there?

Difficulty selling Association assets might be true. However, many Associations have mortgaged common interest assets, land, buildings, etc. Know of one case locally, where the bank filed a foreclousure action against an Assoication for debt secured by common interest assets including land. So the bank must have thought the common interests had some collateral value.

Yes

An attorney who is well versed in BOTH real estate AND corporate / contract law.

Else, do what you will (which will occur anyway).