Special Assessments - Revenue Recognition
From time to time a corporation may need to make a special assessment to pay for emergency expenditures.
There are two revenue recognition issues we must address:
1) When do we recognize the special assessment revenue in the financial statements?
Unfortunately, there is no simple comparison of condominium fees to business revenues, or donation revenues, or taxes.
We account for all fee assessments in the same way, whether they are regular monthly assessments or special assessments. Revenue is recorded when the assessments are due.
In BC, a strata must describe the purpose of the assessment when the assessment is made.
2) Where should the revenue be accounted for?
In BC, the revenue and expenses of a special assessment require their own accounting.