I am a condominium owner in a small homeowners association. By the end of the year 2007 we had about $14K of delinquent A/C which the Board refuses to list in the Balance Sheet as an asset for 2007. In fact there is no Balance Sheet only an Income Statement. The treasurer insists that "Unless an agency sells a product the agency has no need for Accounts Receivable to be counted as an Asset on their books." My knowledge is that in accounting it does not make any differences if an organization sells or exchanges goods or services for profit or non-profit. If these $14K delinquent accounts are not recorded in the balance sheet, it will leave the doors wide open for fraud or embezzlement. Those delinquent accounts are something of value and therefore part of the association's asset.

Can someone with adequate knowledge please comment on this?

Since the association has not recorded the receivables, there cannot be the allowance account that RDS suggests.

Perhaps the association's report should have a footnote stating "As of December 31, 2007 there are $14,000 of association dues that are delinquent." The total amount should be supported by a listing of the names and amounts past due. In addition I would send a personal statement to each member which would list only that member's past due amount. This would provide a confirmation of the balances thought to be past due.

Do you use cash basis or accrual accounting practices???