Condominium Finance Management is similar to most businesses, with a few key differences: First, the revenue is generated through owners' maintenance fees, rather than sales. In this way, it is a lot more like a small town than a normal business. Second, while condominiums can accept fees for certain items like parking spaces or lockers, the goal is to have zero profit or loss at the end of the year. In other words, the condominium is supposed to collect only what it needs to maintain itself. Third, there are two funds in a condominium, the Operating Fund for day to day use, and the Reserve Fund for major repairs and replacements. Finally, investments for condominiums are limited to GICs and a few other investment types that are insurable under CDIC. This is meant to protect the unit owners from risky investments.

Condominium Finance Management uses the same reports as any other business. Of course there are many other reports that apply to condominiums (accrual reports, investment reports, bank reconciliations, etc) but those listed below form the backbone of any financial package.

Balance Sheet

A balance sheet shows the financial position of the condominium at a given moment in time. Balance sheets are an excellent way to see a summary of how much the corporation has in each of its accounts, including money owed to the corporation, money the corporation owes to others, and various other balances. This is another report that will appear in the audited financial statements, and a useful tool when reviewing the corporations financial position.

Income Statement

An income statement (also known as a Profit and Loss, or “P&L”) is a document that shows the revenue and expenses of the condominium for a period of time, broken down by category. Most income statements also give budgeted numbers, and “Year to date” numbers, which show how much was earned/spent so far in the year. This can be used to see which items are over/under budget, which items the corporation spends the most money on, and which items need to be reviewed. Income statements are extremely valuable when reviewing the corporation’s finances, and are included in all audited financial statements.

Reserve Fund Schedule

This document shows the opening balance in the Reserve Fund, as well as the income and expenses for this account. It is similar to the income statement but specific to the Reserve Fund.

Cash Flow

This report is used less in condominiums since the revenue is guaranteed through maintenance fees