Accounting for management company

[tipex]

Hi, I was wondering if there are any standards regarding the preparation of accounts for a management company. My most specific query is when a owner moves into an apartment block and pays management fee, is that fee for the year from date of ownership or is it from the date the management agent began operations in the buidling, or from date of beginning of accounting year for management company.

 

[ClubMan]

Hi, I was wondering if there are any standards regarding the preparation of accounts for a management company.

The [broken link removed] that apply to any other (presumably) Limited company?

My most specific query is when a owner moves into an apartment block and pays management fee, is that fee for the year from date of ownership or is it from the date the management agent began operations in the buidling, or from date of beginning of accounting year for management company.

If this is a query about your own specific situation then ask your solicitor and/or read the management company lease agreement.

 

[ubiquitous]

Hi, I was wondering if there are any standards regarding the preparation of accounts for a management company. My most specific query is when a owner moves into an apartment block and pays management fee, is that fee for the year from date of ownership or is it from the date the management agent began operations in the buidling, or from date of beginning of accounting year for management company.

Sorry I don't understand your question. Is your query about the preparation of accounts, or about the validity or otherwise of the company's invoicing policies?

 

[tipex]

Sorry if not explaining properly, it's more about the revenue recognition, i'm just trying to review accounts for our management company. Our year end is 31 December, but management agent came into existence on 1 April and at year end for an owner who paid fees in june being treated as having three months credit as opposed to six. Normal accounting rules would say at 31 December that person who paid at 30 June is entitled to six months credit as only owner for six months but the mgt agent is treating person as having had to pay from 1 April and therefore at year end is only entitled to a three month credit.
The query is not about the owners losing out because the management does credit them again with three months at 1 April of following year it's about the balances in the accounts - creditors and income being misstated.

 

[badbrian]

Is the person who paid in June paying from the 12 months from June or the 12 months from April. I know it is a new owner but were the fees paid up until then?
If the payment is for the 12 months up to the end of March, which i assume it is then there are 3 months to show as prepaid at 31 December and therefore 9 months to be shown in income.

When the fee was paid is not relevant. Only the period to which it relates.

 

[ubiquitous]

Normal accounting rules would say at 31 December that person who paid at 30 June is entitled to six months credit as only owner for six months.

No they wouldn't. Accounting standards do not dictate to a company how they devise their invoicing policies, nor are they designed to do so.

For example a company like Aer Arann might have invoicing policies that are wildly different from those of, say, Ryanair. This has no relevance to either company's compliance with accounting standards.