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

Karen-Titolo · ‎July 10, 2025

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?

Rainflurry · ‎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 · ‎July 10, 2025

@Karen-Titolo

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

Jeree · ‎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 · ‎July 14, 2025

@Jeree @Karen-Titolo

Thanks for letting me know. Glad it helped!

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