Discussion:How do I book assets given to 1120H Corp Free & Clear
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Discussion Forum Index --> Accounting Questions --> How do I book assets given to 1120H Corp Free & Clear
| 25 March 2008 | |
| This is going to be a strange question and I hope I know how to ask it. I have a new client that is an RV Park Homeowner's Association. They have not had the club house, sewer plant and I think some other major assets recorded on their books. As I understand, a contractor owned it and as of 12/31/07, gave the assets to the Homeowner's Association free and clear. I know where to post the Debit side, but where would the credit go? There is no liability, would there be another equity account? I would appreciate any help on this. | |
RoyDaleOne (talk|edits) said: | 25 March 2008 |
| Capital - in the equity section of the chart of accounts. | |
| 25 March 2008 | |
| So, I would book the assets and then be able to depreciate them, beginning on the date they became the Association's?
Thank you so much for the response. | |
| 25 March 2008 | |
| Generally speaking common area property transferred from the developer is not capitalized. Property acquired by the Association through purchase would be capitalized and depreciated. | |
| 26 March 2008 | |
| OK, so I would record the assets to capital and not depreciate them. | |
| 26 March 2008 | |
| Generally no, the association doesn't capitalize the assets. The common areas are owned collectively by the homeowners not the Association. It just gets disclosed in the financial statements. | |
| 26 March 2008 | |
| Thank you so much for the help. I'm not sure I'm not over my head in this one! | |
| 26 March 2008 | |
| As has been said here many times, buy the PPC books, it'll clear up a lot of your questions. HOA's can be a lot more complicated than you think. | |
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