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Hello. I am a board member of our 6 unit HOA (Very small HOA). We have a question as to when to capitalize or expense large payments from our Reserve account.
1. We just purchased three 1,500 water tanks (we have well/septic systems) for $7,250.
A. Is this expensed to Repairs and Maintenance or…
B. Is this capitalized to Equipment and amortized?
2. We are repairing a roof by replacing some broken/rotting wood (a small portion of the roof) and re-shingling the roof with a more appropriate shingle for today’s standards for $12,150 (roof was 22 years old.)
A. Is this expensed to Repairs and Maintenance or…
B. Is this capitalized to Building Improvements and amortized?
3. I was told we shouldn’t put our Buildings, Equipment and Improvements on our Balance Sheet. Is this true? And if so, why not?
*If it is expensed, how do you adjust the Income and Expense Statement so that the financial statements do not show a loss?
*We are so small, we cannot afford a Management company or an Accountant, although, we may have to, if this doesn’t work!
Thank you so much!
JL
Board member
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