CAPITILZATION OF ASSETS

Can you sell them? If not, then they don't have a real value.

I think I may try that!

I would think that they would not be listed because they are not considered investments... only when they are liquidated would they be listed on the balance sheet.

Frank,

Although they are fixed assets, I think they would only get on the balance sheet if the HOA paid for them. And it wouldn't be the value, just the purchase price or cost to build. Usually they are built and paid for by the developer and are just a part of the HOA, same as the common areas.

Despite all the falderal here, The short answer is, "It depends." You need to ask, "For what purpose?" You need to determine what decisions would be affected by the inclusion of an asset valuation on the balance sheet.

If you are seeking a loan (perhaps using the assets as collateral), then a lender would expect to see a value placed on the assets and included on the balance sheet. If you are seeking insurance, then the insurance company would made a determination as to the replacement value of the asset. And, of course the assessor makes a determination of value, sometimes based on the reasonable market value of equivalent property, were the assets in question salable. (But the assessor doesn't care if it is on the balance sheet or not.)

I believe that generally accepted accounting principles would require that the assets appear on the balance sheet, which may be a factor in securing a clean audit letter by a certified public accountant.

Mary is wrong in thinking that "they would only get on the balance sheet if the HOA paid for them." An asset is an asset regardless of how acquired. (Even a charitable organization is required to show assets on the balance sheet that are given to it.)

From my perspective to get a complete financial snapshot of the strength of the association, I would lean toward including the value (either cost or replacement value) of such property on the balance sheet, offset by depreciation (funded via a corresponding increase in the Reserve Fund).

Falderal? Wowie. I had to look that one up. Strangely, my Encarta dictionary did not contain a definition. Further research, however, reveals it is an alternate spelling of another word, a colloquial, meaning Nonsense; foolish talk.

Keep 'em coming, babe.

Frank,

"Despite all the falderal here. . ." applies to George's responses too. How do you know that he knows what he's talking about?

So true, Robert, so true. I, too, think they've got a pretty good site here.

On the other hand, I think "George"'s "falderal" lashing was specifically referring to all the previous comments on this particular thread.

So that sort of narrows down what he deems as "falderal."

It appears that, while I agree we all can get into "nonsense" territory pretty fast on various threads, in this case, all that came before "George"'s post is apparently "nonsense."

Oh well.

I've been called our for worse by better!

Robert,

I second your motion! And I think that should also include signs of grandiloquent mannerisms.

Now, perhaps from time to time, a bit of foolish nonsense is displayed on this site, but no one is ever chastised for it. In fact, IMO, a little light-hearted fun is agreeable to the majority here.

What we don't need is someone coming here and trying to upset the apple cart. We have a great site here with a ton of great people. We can be serious and we can have a little spontaneous fun. We know we're not perfect and we know we're only projecting our opinions on a topic that is near and dear to each of us. Anyone who doesn't understand that, just does not belong here. Just my nonsensical opinion of course!!