Overview of Financial Reporting Requirements
Under the Condominium Property Regulation, condominium corporations in Alberta must prepare financial statements that include:
A balance sheet
A statement of revenue and expenditures
A statement of reserve fund operations
These reports provide unit owners and board members with a clear understanding of the condominium corporation’s financial health and allow for informed decision-making regarding budgeting, maintenance, and long-term financial planning.
Monthly vs. Annual Financial Statements
Monthly Financial Statements
Provide an ongoing view of the corporation’s financial status.
Typically include cash flow statements, income and expense reports, and budget comparisons.
Help the condominium board monitor spending, identify issues, and adjust budgets as needed.
Annual Financial Statements
Must be prepared annually in accordance with the Condominium Property Regulation.
Include audited financial reports unless the owners vote to waive the audit requirement and have a review engagement completed instead.
Provide a full summary of the corporation’s financial performance over the year.
Required Financial Documents
1. Balance Sheet (Assets, Liabilities, and Fund Balances)
A balance sheet is a financial statement that shows the corporation’s financial position at a specific point in time.
Key Components:
Assets: Cash, accounts receivable, and other resources owned by the corporation.
Liabilities: Accounts payable, outstanding loans, and any financial obligations.
Fund Balances: The difference between assets and liabilities, showing the net financial position.
2. Statement of Revenue and Expenditures (Operating Fund Performance)
This statement provides an overview of all income and expenses for the condominium’s operating fund over a set period.
Key Components:
Revenue: Condominium fees, rental income, special assessments, and interest earnings.
Expenses: Maintenance, management fees, insurance, utilities, and other operational costs.
Net Income or Loss: The difference between total revenue and total expenses.
3. Reserve Fund Report (Planned vs. Actual Contributions and Expenditures)
The reserve fund report outlines the corporation’s reserve fund contributions and expenses, ensuring compliance with Alberta regulations.
Key Components:
Planned Contributions: Amounts allocated for future repairs and replacements.
Actual Contributions: Funds deposited into the reserve account.
Planned Expenditures: Anticipated costs for major repairs and replacements.
Actual Expenditures: Reserve fund withdrawals for completed projects.
Financial Reporting Obligations of the Condominium Manager
Condominium managers play a key role in preparing, maintaining, and presenting financial reports to the board. Their responsibilities include:
Ensuring financial records are accurate and comply with Alberta legislation.
Preparing monthly and annual financial statements for the board’s review.
Tracking and categorizing expenses properly to maintain fund integrity.
Assisting with financial audits when required.
Advising the board on budget planning and reserve fund contributions.
