61B-40.007. Financial Reporting Requirements

(1) Financial statements. The financial statements required by Sections 718.301(4)(c) and 721.13(3)(e), F.S., shall at a minimum include the following:

(a) Auditor’s Report;

(b) Balance Sheet;

(c) Statement of Revenues and Expenses;

(d) Statement of Changes in Fund Balances;

(e) Statement of Cash Flows; and

(f) Notes to Financial Statements.

Items (a) through (f) shall be referred to within this rule as financial statement components.

(2) Disclosure requirements. The financial statements required by Sections 718.301(4)(c) and 721.13(3)(e), F.S., shall contain the following disclosures within the financial statements, notes, or supplementary information:

(a) Reserve disclosures as follows:

1. The beginning balance in each reserve account as of the beginning of the fiscal period audited;

2. The amount of assessments and other additions to each reserve account, including authorized transfers;

3. The amount expended or removed from each reserve account, including authorized transfers;

4. The ending balance in each reserve account as of the end of the fiscal period audited; and

5. The manner by which reserve items were estimated, the date the estimates were last made, and the policies for allocating reserve fund interest income.

(b) The method by which assessments and expenses were allocated to the purchasers;

(c) If a guarantee pursuant to Section 718.116(9) or 721.15(2), F.S., existed at any time during the fiscal year, the following shall be disclosed:

1. The period of time guaranteed;

2. The amount of common expenses incurred during the guarantee period;

3. The amount of assessments charged to the non-developer unit owners during the guarantee period;

4. The amount of the developer’s payments; and

5. Any financial obligation due to or from the developer resulting from the guarantee;

(d) Assessment revenues attributable to the developer disclosed separately from those attributable to the purchasers; and

(e) A detailed schedule of actual and budgeted revenues and expenses of the operating fund.

(3) Multicondominium associations. For multicondominium associations, the audited financial statements required by Sections 718.301(4)(c) and 721.13(3)(e), F.S., may present the financial statement components on a combined basis as long as the financial statements, notes, or supplementary information disclose the revenues, expenses, and changes in fund balance for each condominium and the association, as applicable. Additionally, the financial statements, notes, or supplementary information shall disclose the following:

(a) The revenues and expenses of the association not directly related to any specific condominium and the method used to allocate such expenses to the purchasers, or such condominiums, as applicable; and

(b) The reserve disclosures required by paragraph (3)(a) of this rule, presented separately for each condominium and for any association reserves not directly related to any specific condominium.

(c) The provisions of this rule shall apply to multicondominium financial reporting for fiscal periods ending on or after December 31, 2002. Earlier application of the provisions of this rule is permitted.

(4) Timeshare license plans. The financial statements of a timeshare license plan shall include all of the activities of the timeshare plan. The financial statements need not include the activities of the developer or any other entity except to the extent required by generally accepted accounting principles or generally accepted auditing standards including items such as disclosure of related party transactions. However, if the financial statements of the timeshare plan include the activities of the developer or any other entity, the financial statements shall use a separate fund reporting format for the activities of the timeshare plan.

(5) Condominium associations operating both timeshare condominium units and non-timeshare condominium units. The financial statements of a timeshare plan operated by a condominium association that also operates non-timeshared units shall include only the activities of the timeshare plan. Alternatively, the association may prepare audited financial statements including all of the activities of the association as long as the financial statements use a separate fund reporting format for the activities of the timeshare plan.

(6) Effective date for financial reporting requirements. Subject to the scope provisions of Rule 61B-40.002, F.A.C., the provisions of Rule 61B-40.007, F.A.C., shall apply to the financial statements required by Sections 718.301(4) and 721.13(3), F.S., for fiscal periods ending on or after December 31, 1995. For fiscal periods ending before December 31, 1995, a managing entity may elect to apply the provisions of Rule 61B-40.007, F.A.C., in lieu of applying Rule 61B-22.006, F.A.C., but the division shall not enforce the provisions of Rule 61B-40.007, F.A.C., as to the financial statements for such fiscal periods.

Specific Authority 718.501(1)(f), 721.03(2), 721.26(6) FS. Law Implemented 718.111(13), 718.301(4)(c), 721.03(3), 721.13(3)(e) FS. History– New 2-5-96, Amended 10-21-98, 12-18-01.