Developer Turnover

When you say “the HOA has not been fully turned over” do you mean the developer still has a majority of the board?

I’m not sure what your question is, then. It’s his Association, his problem.

Even then, I’m not sure what accounting questions you have. If the Association is paying utility bills, janitor services, etc., those just go in the I&E as expenses,

I recommend you speak with your accountant. In my experience, association (HOA and condominium) capital assets are not recorded in the accounting system and do not appear as assets on the balance sheet. Also, there is no depreciation.

You may wish to use a search engine to see if you can obtain background information on accounting concepts for homeowner's associations (or similar verbiage).

I also recommend you familiarize yourself with the concept and practice of Reserve Studies for repair and replacement of capital assets. In a convoluted, way that is where the value of a capital asset is recorded and funds are set aside for replacement--sort of a backward depreciation process.

Variations from GAAP take place in aspects of not for profit HOA or condominium accounting. I personally wish the accountants would drop the requirement to use accrual accounting and recognize HOA and condo accounting is largely on a cash basis.

What Bill said. In my experience these assets are not carried on your books, nor are they depreciated. As a non-profit your Association uses different accounting than a for profit would.

However, as the developer runs the Association it is his task to perform the accounting. At most you should just be double-checking his work. I assume he publishes financial states each month?

Also, you do need to check to see if long term repair and replacement reserves have been setup.