In Florida, meeting year-end financial reporting requirements is a crucial task. The statutes establish guidelines based on revenue for both Condos (Chapter 718) and homeowners associations (Chapter 720); However, your corporate documents might demand a higher-level report than statutory requirements. We recommend consulting with your attorney to determine if your documents have their own reporting requirement.
The Florida statues revenue requirement for Condos and HOAs are as follows:
Annual Revenue | Level of Service |
$500,000 or more | Audit |
$300,000 to $499,999 | Review |
$150,000 to $299,999 | Compilation |
$149,999 or Less | Cash Receipts and Disbursements |
However, the financial reporting requirements aren't set in stone. With a proper membership vote, the Association can waive the level of service to a lower tier, provided it occurs before the fiscal year's end. (Beginning in July 2024, a Condo can no longer waive the financial reporting requirement for consecutive fiscal years.) All associations are obligated to prepare a minimum cash receipt and disbursement report.
When should your year-end financial report be completed?
Audits are due 120 days after year-end, meaning April 30th for associations with a December 31st year-end. It is also required that the board hire a CPA within 90 days after year end; however, it may be difficult to meet the 120 days reporting deadline if you wait this long. We recommend hiring your CPA no later than October 31st so your CPA can perform some preliminary work to help ensure the deadline is met.
How to determine your Association’s Revenue
Determining your association's revenue isn't a straightforward task. Contrary to popular belief, you should not look at your budget to determine your revenue for the year. Delving into your year-end income statement is a starting point, but complications arise when not all associations record revenue in line with generally accepted accounting principles (GAAP). Reserve income, special assessments income, prior-year surplus, and cable incentive income are common lines which may need to be restated. We recommend consulting with your CPA to determine accurate annual revenue for the reporting period.
If you need assistance determining which level you Association needs, please contact us at 954-952-0385 or Admin@add.cpa
Links to the Florida Statutes:
CONDOS - 718 http://www.flsenate.gov/Laws/Statutes/2014/Chapter718
CO-OPS - 719 http://www.flsenate.gov/Laws/Statutes/2014/Chapter719
HOAs - 720 http://www.flsenate.gov/Laws/Statutes/2014/Chapter720
TIMESHARES - 721 http://www.flsenate.gov/Laws/Statutes/2014/Chapter721
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