Aline Désormeaux

Aline Desormeaux (CPA, CA, Adm.) holds a Bachelor of Business Administration from UQAM and is a member of the Order of Chartered Professional Accountants of Quebec and of the Order of Chartered Administrators of Quebec.

Chartered Professional Accountant since 1992, she specializes in audit, review engagement and notice to the reader, and more particularly as an auditor for several condominium syndicates in Montreal, Nun’s Island, Laval and Mont-Tremblant. She also offers tax planning for corporation, individuals and estate, and financial forecasts services.

The statement of earnings

The statement of earnings is essential for performance assessment and informed decision-making. This statement is expressly required by the article 1087 of the Civil Code of Québec. It states that the income statement, in addition to the balance sheet, the  budget  and the statement of debts and claims, must accompany the notice of the annual meeting.


The statement of earnings is comprised of revenues from which expenses are subtracted to constitute the net income. If revenues exceed expenses, we have a profit or surplus, and in the opposite case we have a loss or deficit. The statement of earnings refers to revenues and expenses, as opposed to receipts and disbursements (see my cash basis of accounting chronicle). The statement of earnings is not a statement of cash flows and it is therefore necessary to recognize revenues and expenses on an accrual basis.

The period covered by the statement of earnings is flexible and can be adapted to the needs of users. The period may cover a day, a week, a month, a quarter, a year or any other interval deemed relevant by the user. Each statement of earnings should be presented with the comparative period of the previous year and the budget for the current period. If you present the results for a month, you should have, for presentation purposes, the comparative result of the same month of the previous year as well as the current budget for the month presented.

For a co-ownership syndicate, it is important to use a fund basis of accounting. Each fund has its own financial statements and therefore its own statement of earnings. The statement of earnings of a given fund is independent of that of other funds. It is not possible to make interfund transfers in a statement of earnings. Interfund transfers are reserved for the statement of changes in net assets.

Having a loss in the statement of earnings is not necessarily a disaster. It is possible that the loss will be foreseen if, for example, the syndicate has accumulated surpluses. If the loss results from unanticipated items during the year and the cumulative surplus is low, the surplus will have to be budgeted in the following year. The important thing is to control income and expenditure.

The information provided by the statement of earnings is highly relevant to the co-owners. For the preparer of the statement, whether it’s the accountant, the manager or an administrator, it is important to be transparent with the information presented. It is not a matter of blowing up each expenditure item into sub-categories, which becomes complex and arduous, but rather a level of detail sufficient to fully understand the nature of each expenditure. Items such as "maintenance and repairs", "office expenses" or "miscellaneous", which may include a series of unventilated revenues and expenses should be kept at reasonable levels. If too little detail is presented, the co-owners are unable to make comparisons and analysis from one period to another, from one condominium to another, and ultimately to assess the management of their condo.

If you have doubts on the detail level to present in the income statement, consult the chart of accounts guide set up by the “Regroupement des gestionnaires et copropriétaires du Québec “ and easily accessible on their site .

Think carefully and take some time to reflect on the various revenues and expenses accounts used in your statement of earnings.


Aline Desormeaux, CPA auditrice, CA

Désormeaux Patenaude inc
1312 Sherbrooke est
Montréal, Québec H2L 1M2
Téléphone : 514 522-2232 EXT. 207
[email protected]

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