Financial Statements for HOAs

Financial Statements normally consist of a Balance Sheet, Income Statement, and a Cash Flow Statement. 

For Associations, the following describes each financial statement and the potential line items they may include:

A Balance Sheet shows the financial position of your association at a specific point in time; for example:  December 31, 20XX.  It's a snapshot of the association's assets, liabilities, and owner's equity(or fund balance).

Assets:

• Cash
• Member assessments and other receivables
• Prepaid expenses
• Property & Equipment 

• Accounts payable (otherwise know has vendor invoices not yet paid)
• Accrued expenses
• Prepaid assessments (members who have paid their dues in advance)
• Loans

Equity(or fund balance):

• This is the association's net worth
• This is a cumulative balance of the revenues and expenses of the association since it began.

An Income Statement shows the association's financial performance over a specific period; for example: 

January 1, 20XX - December 31, 20XX.  It's a snapshot of the association's revenues, expenses, and net income or loss for a particular period.

Revenues may include:

• Member assessments (dues)
• Late fees/fines
• Interest income
• Rental revenue (pool or clubhouse)

Expenses may include:

• Administrative costs (management, office supplies, etc)
• Maintenance and repairs
• Utilities
• Insurance

Net Income (Loss):

• The is the amount left over after subtracting all expenses from revenue.  

A Cash Flow Statement represents the cash inflows and outflows over a specific period.  It offers a comprehensive view of how cash moves through the association's operations, investments, and financing activities.

Operating activities include:

• Cash received from assessment/late fee/ interest/dividend income collections
• Cash payments for day-to day normal operating expenses 

Investing activities include:

• Cash used for property acquisitions
• Cash used for capital expenditures

Financing activities include:

• Loan proceeds
• Repayment of loans