What is an Income Statement?
Understanding your HOA's financial statements are a vital necessity for board members, and homeowners too. You don't need to be a professional accountant or bookkeeper or know the differences between debit and credit (and we're not talking about credit and debit cards), but it helps to understand what the basic financial statements look like, what they mean, and how it impacts your association. In a previous article, we wrote about balance sheets for HOAs . If you didn't read that article, you may want to take a moment to go back and read it. If you think of a balance sheet as a "snap shot" of the HOA's financial situation at a given point in time, you can think of an income statement as a summary of the financial activity for the reported period. HOA income statements are normally prepared on a monthly basis, but you may see them prepared for a quarter, or even an entire fiscal year. An income statement goes by different names. In corporate finance, it...