What is a depreciation report?

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What is a depreciation report?

November 16, 2012 vancouverradiorealtor Leave a comment Go to comments

What is a depreciation report?

A depreciation report is a legislated planning requirement for strata corporations in British

Columbia. Depreciation reports are used to establish long term planning for common property and

common assets to determine:

1) What assets you own ( an inventory )

2) The asset condition ( evaluation )

3) When things need to be replaced ( the anticipated maintenance, repair and replacement )

4) How much money you currently have ( contingency reserve report )

5) What it is likely to cost for future replacement ( a description of the factors and assumptions in

projecting costs)

6) How you are going to pay for the costs ( three cash flow models projecting 30 year

replacement periods )

Be aware that buyers and banks will consider these before they buy or lend. One concern from the chair of CHOA of BC is that a sampling of 2,000 stratas in BC shows that only about $17 per month is contributed to the contingency fund whereby the amount should be 3-4 times that amount to properly maintain a complex. There are about 26,000 strata corporations in the Province whereby most are considered to be underfunded.

Click What a Strata Corporation Needs to Know About Depreciation Reports to read details