The statement of financial position, also known as the balance sheet, lists the assets, liabilities and net assets of the co-ownership syndicate at a specific time. It is a picture of the financial situation at a given date compared to other statements that usually cover a full fiscal year.
The statement of financial position shows assets on one hand and liabilities and net assets on the other. Assets are always equal to liabilities plus net assets. Everyone knows the famous quote "nothing is lost, nothing is created, everything is transformed". This principle is reflected in accounting. The statement of financial position is always balanced since the asset is financed either by the creditors (liabilities) or by the co-owners (the net assets).
November 1st 2016 - A condominium syndicate has the obligation to report its operations using the fund basis of accounting. The article 1071 of the Civil Code of Quebec imposes indeed the creation of a contingency fund. Every condominium has to set up accounts distinguishing the general fund for common operations, sometimes called the administration funds, and the contingency funds.
With respect to the Annual General Meeting, the article 1087 of the Civil Code of Québec provides that certain documents must be attached to the notice of meeting.These documents are to be sent to co-owners so that they can ascertain the exact nature of the questions and issues to be discussed.
Some of these documents, described in the agenda, are a prerequisite to the validity of the decision (such as, a draft amendment to the declaration of co-ownership ). Other documents are, on the other hand, necessary for the information of the co-owners (such as, the budget forecast and the report of the Board of Directors)
Preparing a budget forecast is an unavoidable task in co ownership. Its preparation, preliminary examination and adoption will ensure the proper functioning of the syndicate of co-owners. It is up to the Board of Directors to define its terms, in view of the expenses that will have to be paid to allow a syndicate to meet its obligations. The budget also makes it possible to fix the amount of the contributions of each co-owner to the expenses of the co-ownership.
It will be prepared by the Board of Directors or property manager, based on the amounts spent in preceding financial periods, as well as anticipated non-recurring expenses. The preparation of the budget forecast requires time and rigor.