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Special Levies
Although both the raising of the "Special Levy" Income and the Expenditure directly related thereto fell into 2 separate financial reporting periods is it prudent/correct to bring both the full amounts into the 1st financial reporting period ?
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RE: Special Levies
In my view a Special Levy must be unrelated to the trustees estimates of income and expenditure as approved by owners at the last AGM. Therefore in my opinion the total money raised by the special levy may be partially expended and reported in one financial year and the rest expended and reported in the next financial year.
RE: RE: Special Levies
We obtained quotes for remedial work required ie we knew what our Expenditure was going to be and as such raised the Special Levy for Income to cover same.
Both Income & Expenditure were not estimates.
RE: Special Levies
Hi
As John points out the SL is unrelated to the normal monthly contributions, which are calculated i.t.o. the AGM approved estimates. SL's are for items NOT included in the estimates (PMR31 (4)).
I'm assuming your trustees were aware of this expenditure when the estimates were prepared that is why the term Special levies was put in quotes (?). If my assumption is correct then the trustees were not complying with their instruction per PMR 36 (2) "The estimate of expenses referred to in sub-rule (1) shall include a reasonable provision for contingencies and the maintenance of the common property." Any known item of expenditure for a particular financial year should be included in that year's estimates for inclusion in the calculation of the contributions.
RE: RE: Special Levies
When both the income/expense budgets were prepared we were not aware of the remedial work that needed to be done and as such were not budgeted for.
What we are querying is do we put the full amount of the special levy income raised as well as the full amount of the expenditure into the balance sheet for that period even though both a portion of the income and expenditure extended into the next financial period ??
RE: RE: RE: Special Levies
Hi, Arnold. Your annual financial statements are just that - annual. Any transactions after the end of one financial year will appear in the next financial year. If you have any doubts about that, contact your auditors, who should advise you.
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