other current assets condo hoa

Forum|Forum|7 years ago
January 14, 2019
7 replies
41 views

I think i need to set up an other current asset account for the condo assn Investment account. We use it as a reserve account so based on the market it has wins and losses. Is this that correct was to set it up? Will it need to be reconciled like a bank account? I expect it to appear on the balance sheet. Will it appear on the P&L, if so where? Any other info would be helpful.

Thanks

QuickBooks Desktop

QBsguru

If you are the HOA, this would be the correct way to set up the investment account. Interest and gains and losses are added each month to correspond to the bank statement. Changes in market value are generally recorded using an OTHER INCOME account named UNREALIZED GAINS/LOSSES. Actual gains and losses are not recognized until the funds are sold.

Gains/Losses and Interest Income are P&L accounts.

Rustler

Level 15

@QBsguru wrote:

Changes in market value are generally recorded using an OTHER INCOME account named UNREALIZED GAINS/LOSSES. Actual gains and losses are not recognized until the funds are sold.

Gains/Losses and Interest Income are P&L accounts.

why income?

unrealized gains and losses should be an asset account with an offsetting account as equity, IMO

QBsguru

I disagree. Unrealized gains/loss are an OTHER INCOME account and reflect market changes. I would not touch equity since gains/losses are unrealized. You might want to set Unrealized Gains/loss as a liability account, but not an off-set to equity. The number in this account is not taxable income. It only becomes a tax item when the investments are sold and off-set by Realized gain/loss account. Have been doing it this way for 25 years and statements reviewed and audited by an independent CPA firm show this as acceptable GAAP treatment.

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