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July 10, 2025
Question

when setting up a Reserves chart of Account for non-for-profit Reserves expenses, is it an Equity or an Expense type account?

  • July 10, 2025
  • 3 replies
  • 21 views

Knowing that Reserves expenses are not the same as Operating expenses, nor do they show on a Statement of Financial activity but still need to be accounted for on the Statement of Financial Position, what are the parameters that need to be entered when creating the CofA for Reserves Expenditures?

3 replies

Rainflurry
Level 11
July 10, 2025

@Karen-Titolo 

 

Is this for an HOA?  If so, reserves should be both an income item and an expense, thereby offsetting and having no impact on net income.  I have been treasurer for a couple of HOAs, and below is a copy of one of our YTD income statements from a few years back.  You can see that the 'Reserve Assessment' income is offset by the 'Deposit to Reserves' expense.

 

  

Rainflurry
Level 11
July 10, 2025

@Karen-Titolo 

 

Oops, I forgot to attach the Reserve Equity section of the associated balance sheet:

 

 

 

 

 

July 14, 2025

This was extremely helpful. This picture is worth a thousand words she said. Karen is having trouble accessing this page and wants me to send you a reply because you were so helpful in answering her question. 

Rainflurry
Level 11
July 14, 2025

@Jeree @Karen-Titolo 

 

Thanks for letting me know.  Glad it helped!