How to do the income statement
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How to do the income statement
Income Statement document summarize all income and all expenses occurring during the Financial Year. It is the principal document for Accounts Approval. There are many versions of this document, more or less detailed. The version provided by this site focus on essential aspects of Condominium Administration, keeping it simple. It don't comply width formal bookkeeping procedures.
This document (in the version here supplied) as the following objectives:
- Post revenues received and yet to receive.
- Post expenses aggregated by category.
- Calculate Net Income, separated by ordinary and extraordinary Net Income. Extraordinary Net Income should not be taken in account when making the Financial Plan for next year because they are not expected to repeat on next Financial Period.
- Calculate the Total Net Income of the Financial Administration, and demonstrate how the result reflects on the the Homeowners Council assets (Cash, Bank Accounts, Financial Appliances).
- Validate the exercise.
Note: in this guide its not considered other assets than Cash, and Bank Accounts. If formal bookkeeping procedures are required, physical assets and liabilities must be considered too.
Example of an Income Statement
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Example of an Income Statement
Income Statement for Year N
| Income | Expenses | ||||
|---|---|---|---|---|---|
| Quota's | Balance | Categories | Total | ||
| Fraction A | $332.30 | $0.00 | Water | $111.49 | |
| Fraction B | $295.68 | $23.00 | Electricity | $842.30 | |
| Fraction C | $285.60 | $2.00 | Elevator | $1,707.53 | |
| Fraction D | $285.60 | -$30.00 | Cleaning | $253.20 | |
| … | $313.44 | $0.00 | Cleaning – Detergents | $52.30 | |
| $310.56 | $0.00 | … | |||
| $308.04 | $0.00 | ||||
| $313.44 | $0.00 | ||||
| $286.92 | $0.00 | ||||
| $309.60 | $0.00 | ||||
| $313.44 | $0.00 | ||||
| Total (I) | $3,354.62 | -$5.00 | Total(E) | $2,966.82 | |
| Extraordinary | Extraordinary | ||||
| Fraction D, last year debt | $22.00 | Door fix | $47.20 | ||
| Total (IX) | $22.00 | Total (EX) | $47.20 | ||
| Income Total (TI=I+IX) | $3,376.62 | Expense Total (TE=E+EX) | $3,014.02 | ||
| Net Income (NI=TI-TE) | $362.60 | ||||
| Current Net Income (CI=I-E) | $387.80 | ||||
| Last Year Assets (n-1) | Balance on 12/31/n-1 | End Year Assets (n) | Balance | ||
| Deposit Account | $2,301.23 | Deposit Account | $2,161.83 | ||
| Saving Account | $2,532.30 | Saving Account | $3,125.20 | ||
| Cash | $143.20 | Cash | $52.30 | ||
| Last Year Assets Total (LA) | $4,976.73 | Assets Total (A) | $5,339.33 | ||
| Validation (LA+NI – A) Must be zero | $0.00 |
Description
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Description
Income
For each fraction, in first column, the amount that should be received. In the following column (balance) displays the diferente, positive or negative, between the amount that should be payed and the amount rely payed by the owner.
If the owner payed in excess, the excess will be deducted in next year Quotas, if payed less, it will have to compensate next Year.
There can be extraordinary income. In the present case, owner of faction D payed 22 dollars in debt from last year.
Expenses
On the right we have expenses, aggregated by category.
Extraordinary expenses are present at the end. In this case, the fix of a door is presented as extraordinary expense.
Net income
Is the result of the sum of all revenues less all expenses. This represents the fluctuation in assets during your administration period.
Current Net Income
Is the result of revenues less expenses, not counting width extraordinary revenues or expenses. Current net income is necessary to make the Financial Plan for next Year.
Last Year Assets
Values belong too the commonhold at day 1 of January. This means the money in Cash and Bank Accounts presented at last Income Statement.
In this case we have an total of 4.976,73 $ distributed by Cash, Deposit Account and Savings Account.
End of Year Assets
These is the last Year Assets more this year Net Income. It have to be equal to the sum of all assets at the end of the Year. In this case we have, at 31 of December, 5.339,22$ distributed by Cash and Bank Accounts.
Verification Check
Adding the Last Year Assets (4.976,73$) to this year Net Income (362,60$) it gives 5.393,33$ witch is exactly the value of Assets at day 31 of December, year n.