Question:
I represent a 20 member condo HOA complex. We don’t have any income from party rooms, pools, common areas, etc. The association owns all the land. Should the land have a value that is reflected on the balance sheet AND if so, how is the land value established.
– Christine
Answer:
Hi Christine,
The value of the land owned by your condo HOA should be reflected on the balance sheet as it constitutes a significant asset. According to the cost principle, land should be reported at historical cost on the balance sheet. Historical cost is the cost of acquisition. That being said, it is best to consult an accountant to get a better handle on this issue.
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