FINANCIAL STATEMENT PREPARATION GUIDE
FINANCIAL STATEMENTPREPARATION GUIDE2019
2019 FINANCIAL STATEMENT PREPARATION GUIDETable of ContentsPageFINANCIAL STATEMENT REQUIREMENTS .3LEGISLATIVE & MISCELLANEOUS UPDATES . .4SAMPLE FINANCIAL STATEMENTS .5Independent Auditors’ Report 7Balance Sheet .9Statement of Operations .11Statement of Partners’ Equity .16Statement of Cash Flows 17Notes to the Financial Statements .19COMPONENT AUDITOR LETTER (Required and Provided by Enterprise Annually).34BACKUP REQUIREMENTS CHECKLISTS FOR EQUITY FUND AUDITORS .35SFAS No. 144 IMPAIRMENT ANALYSIS .36SFAS No. 144 IMPAIRMENT WORKSHEET .37CAPITAL CONTRIBUTIONS & DEVELOPMENT FEES .39CONTACT INFORMATION 40FREQUENTLY ASKED QUESTIONS 41RESOURCES .422
2019 FINANCIAL STATEMENT PREPARATION GUIDEFINANCIAL STATEMENT REQUIREMENTSDocuments due by February 15, 2020, where a draft is required:ooDRAFT Audited Financial Statements in their entirety, including footnote disclosures andsupplemental informationTrial balance and CPA Journal Entries to support draft audit numbers (uploaded as work papers)Remember: Our review is required before you direct your CPA to issue the FINAL.Documents due by March 1, 2020*, where a draft is not required:oooFINAL Audited Financial Statements with signed opinionTrial balance and CPA Journal Entries to support audit numbers (uploaded as work papers)CPA Component Auditor Letter - Please note that this can (and should) be uploaded to our portalprior to the Final Audit*If submission of Final Audit is not possible by March 1, 2020, please upload a draft along with a list ofremaining open items in the comments section on the Financial Reporting Portal.Additional Information available on our website ial Reporting Portal “Quick Reference Card”Financial Statement and Tax Return Preparation GuidesLimited Partnerships financial statement and tax return deadline requirementsFrequently Asked QuestionsDocument SubmissionoFinancial Statements are required to be submitted through our secure Financial Reporting Portal(www.e360community.com). In addition, we request that trial balances, depreciation schedulesand CPA journal entries be uploaded as well. Please refer to the Community Quick ReferenceGuide for further details located at ncialreporting.oAll CPA firms and sponsors should have received registration information to access our FinancialReporting Portal for LIHTC Financial Reporting. If you have not registered or received theinformation to do so, please contact us at financialreporting@enterprisecommunity.com.Should you have any questions or concerns about the above, please contact your Asset Manager/AccountingManager or email us at financialreporting@enterprisecommunity.com.3
2019 FINANCIAL STATEMENT PREPARATION GUIDELegislative & Miscellaneous UpdatesFASB changes that will impact year-end 2019 financial reporting and disclosurerequirements.As you are aware, there was an Accounting Standard Update in 2015 that changes the treatmentof Debt Issuance Costs on the financial statements. Please ensure that the requirements asdisclosed on the FASB website (http://www.fasb.org/home) are reflected on your financialstatements. Non-conformance with this update may delay our Fund Audit delivery. We urge youto look at all of the disclosure requirements of ASU 2015-3 (see extract below per the FASB’swebsite).Accounting Standard Update (ASU 2015-3): Simplifying the Presentation of Debt IssuanceCostsThe Financial Accounting Standards Board ("FASB") issued ASU No. 2015-03,Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs.ASU 2015-03 requires partnerships to present debt issuance costs as a direct deduction from thecarrying value of the related debt liability, and amortization is required to be included withinterest expense in the statements of operations.For Public Business Entities, ASU 2015-03 is effective for fiscal years beginning afterDecember 15, 2015 and interim periods within those fiscal years.For all other entities, the amendments in this Update are effective for financial statementsissued for fiscal years beginning after December 15, 2015, and interim periods within fiscal yearsbeginning after December 15, 2016.An entity should apply the new guidance on a retrospective basis, wherein the balance sheet ofeach individual period presented should be adjusted to reflect the period-specific effects ofapplying the new guidance. Upon transition, an entity is required to comply with the applicabledisclosures for a change in an accounting principle. These disclosures include the nature of andreason for the change in accounting principle, the transition method, a description of the priorperiod information that has been retrospectively adjusted, and the effect of the change on thefinancial statement line items (that is, debt issuance cost asset and the debt liability).4
2019 FINANCIAL STATEMENT PREPARATION GUIDEFINANCIAL STATEMENTS ANDINDEPENDENT AUDITORS’ REPORTXYZ LIMITED PARTNERSHIPDECEMBER 31, 20XX AND 20XX5
2019 FINANCIAL STATEMENT PREPARATION GUIDETABLE OF CONTENTSPAGEINDEPENDENT AUDITORS’ REPORTXFINANCIAL STATEMENTSBALANCE SHEETSXSTATEMENTS OF OPERATIONSXSTATEMENTS OF PARTNERS EQUITY (DEFICIT)XSTATEMENTS OF CASH FLOWSXNOTES TO FINANCIAL STATEMENTSX6
2019 FINANCIAL STATEMENT PREPARATION GUIDEIndependent Auditors’ ReportTo the PartnersXYZ Limited PartnershipCity, StateReport on the Financial StatementsWe have audited the accompanying financial statements of XYZ Limited Partnership, whichcomprise the balance sheet as of December 31, 20XX, and the related statement of operations,partners’ equity, and cash flows for the year then ended, and the related notes to the financialstatements.Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statementsin accordance with accounting principles generally accepted in the United States of America; thisincludes the design, implementation, and maintenance of internal control relevant to thepreparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error.Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditor considersinternal control relevant to the entity’s preparation and fair presentation of the financialstatements in order to design audit procedures that are appropriate in the circumstances, but notfor the purpose of expressing an opinion on the effectiveness of the entity’s internal control.Accordingly, we express no such opinion. An audit also includes evaluating the appropriatenessof accounting policies used and the reasonableness of significant accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.7
2019 FINANCIAL STATEMENT PREPARATION GUIDEEmphasis of Matter - Change in Accounting PrincipleAs discussed in Note 2 to the financial statements, the Partnership has early-adopted ASU No.2015-03, Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs.Our opinion is not modified with respect to that matter.OpinionIn our opinion, the financial statements referred to above present fairly, in all material respects,the financial position of XYZ Limited Partnership as of December 31, 20XX, and the results ofits operations and its cash flows for the year then ended in accordance with accounting principlesgenerally accepted in the United States of America.Other MatterOur audit of the financial statements was conducted for the purpose of forming an opinion on thefinancial statements as a whole. The supplementary information required by is presentedfor purposes of additional analysis and is not a required part of the financial statements. Suchinformation is the responsibility of management and was derived from and relates directly to theunderlying accounting and other records used to prepare the financial statements. Theinformation has been subjected to the auditing procedures applied in the audit of the financialstatements and certain additional procedures, including comparing and reconciling suchinformation directly to the underlying accounting and other records used to prepare the financialstatements or to the financial statements themselves, and other additional procedures inaccordance with auditing standards generally accepted in the United States of America. In ouropinion, the information is fairly stated in all material respects in relation to the financialstatements as a whole.City, StateDate8
2019 FINANCIAL STATEMENT PREPARATION GUIDEXYZ LIMITED PARTNERSHIPBALANCE SHEETASSETSDecember 31,20XX20XXCURRENT ASSETSCash – operationsCash – entityTenant accounts receivableSubsidy accounts receivableDue from AffiliatesOther ReceivablesPrepaid expensesPrepaid Interest Total current assetsxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxDEPOSITS HELD IN TRUSTTenant depositsxxxxRESTRICTED DEPOSITS AND FUNDED RESERVESOperating ReserveReserve for replacementsLease-up reserveTax and Insurance escrowOther restricted reservesxxxxxxxxxxxxxxxxxxxxxxxxxxLess accumulated depreciationxxxxxxxxxxxxxxxxxxxxxxxxxxxxTotal rental Total restricted deposits and funded reservesRENTAL PROPERTYLandBuildings & ImprovementsConstruction in ProgressOffice furniture and equipmentOTHER ASSETSTax Credit fees, net of accumulated amortization of XXOrganizational Costs, net of accumulated amortization of XXPartnership Fees, net of accumulated amortization of XXUtility and Other DepositsLand LeaseOther AssetsInvestment in PartnershipTotal assets9
2019 FINANCIAL STATEMENT PREPARATION GUIDEXYZ LIMITED PARTNERSHIPBALANCE SHEET (CONTINUED)LIABILITIES AND PARTNERS' CAPITALDecember 31,20XX20XXCURRENT LIABILITIESAccounts PayableAccounts payable - constructionReal Estate Taxes PayableAccrued Expenses & Other LiabilitiesDue to affiliatesAccrued interest - first mortgageAccrued interest - affiliatesAccrued interest – notesAccrued interest – construction loanDeferred rental incomeMortgage payable - (Current Portion) xx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxTotal current liabilitiesxxxxxxDEPOSIT LIABILITYTenant deposits held in xxxxxxxxxxxxxxxTotal long-term liabilitiesxxxxxxxxTotal liabilitiesxxxxxxxx--xxxxxxLONG-TERM LIABILITIESMortgage payable - first mortgage (net of Current Portion)Less unamortized deferred financing costsMortgage payable – first mortgage payable (net of Current Portion andDeferred financing costs)Mortgage payable -affiliatesNote payableNotes payable - affiliatesConstruction loan payableDeferred Development fee payableDeferred Interest PayableCOMMITMENTPARTNERS' CAPITALTotal liabilities and partners' capital 10xxxx xxxx
2019 FINANCIAL STATEMENT PREPARATION GUIDEXYZ LIMITED PARTNERSHIPSTATEMENT OF OPERATIONSREVENUEDecember 31,20XX20XXRENT REVENUERent revenue - gross potentialSubsidized Tenant RentCommercial Rent – gross potentialVacanciesVacancies – commercialConcessions Net rental revenueFINANCIAL REVENUEFinancial revenue - project operationsRevenue from investments - replacement reserveTotal financial revenueTenant chargesGrant IncomeOther IncomeTotal other revenueTotal revenue 11xxx xxx xxxxxxxxxxxxxxxxx xxx
2019 FINANCIAL STATEMENT PREPARATION GUIDEXYZ LIMITED PARTNERSHIPSTATEMENT OF OPERATIONS (CONTINUED)EXPENSESDecember 31,20XX20XXADMINISTRATIVE EXPENSESManagement consultantsAdvertising and marketingOffice salariesOffice expensesManagement feeLegal expense – projectAuditing expenseBookkeeping fees/accounting servicesBad debtsStaff Rent Free UnitSecurity Payroll/ContractSocial and Other Tenant ServicesPayroll TaxesHealth Insurance & Other Employee BenefitsTelephoneMiscellaneous administrative expensesTotal administrative expensesUTILITIES EXPENSESFuel OilCoalElectricityGasWaterSewerOther UtilitiesTotal Utilities12 xx xxxxxxxxxxxx xxx xxx xx xxxxxxxxxxxxxxxxxxxxxxxxxx xx xx
2019 FINANCIAL STATEMENT PREPARATION GUIDEXYZ LIMITED PARTNERSHIPSTATEMENT OF OPERATIONS (CONTINUED)EXPENSESDecember 31,20XX20XXOPERATING AND MAINTENANCE EXPENSESRepairs & Maintenance PayrollCleaningRepairs ContractsPainting & DecoratingElevator MaintenanceExterminatingTrash RemovalGrounds MaintenanceHVAC MaintenanceSuppliesOther Repairs & MaintenanceSnow RemovalEquipment Maintenance & RepairsMiscellaneous operating and maintenance expensesTotal operating and maintenance expensesTAXES AND INSURANCEReal estate taxesProperty and liability insuranceWorkmen's compensationMiscellaneous taxes, licenses, permits and insuranceTotal taxes and insurancePROPERTY MANAGEMENT FEESProperty Management FeesTotal Property Management Fees13 xx xxxx xxx xxx xx xxxxxxxxxxxxxx xx xx xx xx xx xx
2019 FINANCIAL STATEMENT PREPARATION GUIDEXYZ LIMITED PARTNERSHIPSTATEMENT OF OPERATIONS (CONTINUED)EXPENSESDecember 31,20XX20XXMUST PAY FEESPartnership Admin/MgmtOther Management xx xxxxxxTotal Must Pay Fees xx xx xx xxxxxxxxxxxxxx xx xx xx xxxxxx xx xx xxx xxxxxxxxxxxxxxxxxxxxx xxx xxxCASH FLOW CONTINGENT FEESPartnership Admin/Mgmt.Investor Services FeeIncentive Management Fees.Other ManagementTotal Cash Flow Contingent FeesMISCELLANEOUS EXPENSEMiscellaneous ExpenseGround RentTotal Miscellaneous ExpensesFINANCIAL EXPENSESInterest on mortgage payableInterest on notes payable - long-termDeferred Interest ExpenseMortgage Insurance PremiumTotal financial expenses14
2019 FINANCIAL STATEMENT PREPARATION GUIDEXYZ LIMITED PARTNERSHIPSTATEMENT OF OPERATIONS (CONTINUED)EXPENSESDecember 31,20XX20XXOPERATING RESULTSTotal cost of operations before depreciation and amortizationLoss before depreciation and amortization xxx xx xxxxxDEPRECIATION AND AMORTIZATIONDepreciation expenseAmortization expense xxx xxxxxxxTotal depreciation and amortization xxx xxx xxx xxxxxxxxxxxxxxxxxxxxxTotal Nonoperating expenses xxx xxxTotal expenses xxxx xxxxNet (income) loss xx xxNONOPERATING EXPENSESImpairmentOrganization expenseCapital Gains/LossExtraordinary Items**If the Statement of Operations is not detailed as stated above please includeSupplementary Information.15
2019 FINANCIAL STATEMENT PREPARATION GUIDEXYZ LIMITED PARTNERSHIPSTATEMENT OF PARTNERS’ EQUITY (DEFICIT)Years ended December 31, 20XX and 20XXGeneralPartnersTOTALPartners’ equity(deficit), December31, 20XX CapitalContributionsUnrealizedGain/(Loss) onMarketableSecuritiesSyndication Costs(if applicable) XXX Partners’ equity(deficit), December31, 20XXUnrealizedGain/(Loss) onMarketableSecuritiesCapitalContributionsNet loss XXX*LimitedPartner # 2 XXXXXXXXXXXXXXXX-----(X)(X)(X)(X)Net lossPartners’ equity(deficit), December31, 20XXXXX*LimitedPartner # 1Accumulated XXX)XXXXXXXXX XXX 16XXX
2019 FINANCIAL STATEMENT PREPARATION GUIDEXYZ LIMITED PARTNERSHIPSTATEMENT OF CASH FLOWSYear ended December 31,20XX20XXCash flows from operating activities (xx,xxx) (xx,xxx)Net lossAdjustments to reconcile net loss to net cash provided by (used in)operating xxxx,xxx(Increase) decrease in accounts receivable - tenants(xx,xxx)(x,xxx)(Increase) decrease in accounts receivable - x,xxx)x,xxx--x,xxxx,xxxIncrease (decrease) in accrued interest payablexx,xxxxx,xxxIncrease (decrease) in real estate taxes xx)Withdrawals from reserve for replacements--Principal collections on notes receivable--(Increase) decrease in miscellaneous receivables(Increase) decrease in prepaid expenses(Increase) decrease in real estate taxes and insurance escrowIncrease (decrease) in accounts payableIncrease (decrease) in government overage payableIncrease (decrease) in accrued expensesNet security deposits received (paid)Net cash provided by (used in) operating activitiesCash flows from investing activitiesIncrease in rental propertyDeposits to reserve for replacements17
2019 FINANCIAL STATEMENT PREPARATION GUIDEProceeds from sale of rental property(Identify other inflows and outflows) Operating Reserve Deposit-(xx,xxx)(xx,xxx)(xx,xxx)Net cash provided by (used in) investing activitiesCash flows from financing activities- (xx,xxx)- -Loans from general partners--Mortgage proceeds--Loan proceeds from related partiesx,xxxxx,xxxLoan repayments to related parties--Principal payments on mortgage(xx,xxx)(xx,xxx)Partner contributionsxxx,xxx-Partner withdrawals--(Identify other inflows and xxxNet cash provided by (used in) financing activitiesNET INCREASE (DECREASE) IN CASHCash, beginningCash, end xx,xxx xx,xxx xx,xxx xx,xxx Supplemental disclosure of cash flow informationCash paid during the year for interest18
2019 FINANCIAL STATEMENT PREPARATION GUIDEXYZ LIMITED PARTENRSHIPNOTES TO THE FINANCIAL STATEMENTSNOTE 1 – ORGANIZATIONXYZ Limited Partnership (the Partnership) was organized as a limited liability partnership on[DATE] under the laws of the State of [STATE] for the purpose of acquiring, constructing andoperating a [NUMBER] unit apartment complex located in [CITY], [STATE] The property wasplaced in service on [DATE].The term of the partnership shall continue until [DATE], unless dissolved sooner in accordancewith the provisions of the Limited Partnership Agreement.The project has qualified for and been allocated low-income housing credits pursuant to theInternal Revenue Code Section 42 (Section 42), which regulates the use of the project as tooccupant eligibility and gross unit rent, among other requirements. The project must meet theprovisions of these requirements during each of the 15 consecutive years in order to remainqualified to receive the credits. (If Applicable - In addition, the Partnership has executed a landuse restriction agreement which requires the utilization of the project pursuant to Section 42 for aminimum of 30 years, even if the Partnership disposes of the project.)NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESCash Equivalents (If Applicable)Included in cash equivalents are short-term investments in money market funds or marketablesecurities with original maturities of 90 days or less when purchased. The securities are carried atcost, which approximates fair market value.Investment Securities (If Applicable)Investment securities consist of marketable U.S. Treasury debt securities and certificate of depositsmaturing within five years, which are cl
Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires partnerships to present debt issuance costs as a direct deduction from the carrying value of the related debt liability, and amortization is required to be included with interest expense in the statements of operations.
E5-13 Statement of cash flows—classifications. Moderate 15–20 E5-14 Preparation of a statement of cash flows. Moderate 25–35 E5-15 Preparation of a statement of cash flows. Moderate 25–35 E5-16 Preparation of a statement of cash flows. Moderate 25–35 E5-17 Preparation of a statement of cash flows and a statement of financial position.
A financial statement that has been audited and represents all components of a financial statement including balance sheet, cash flow statement, and income statement. An unaudited financial statement for which the financial data has been assembl
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statement, the entity can summarize the statement, but they must still present the details in the financial statement notes (Exhibit 4). The new cash flow statement The Cash Flow Statement is the only statement that will retain its existing name. Its format is similar to today’s f
MONTHLY FINANCIAL REPORT (Containing the Statement of Financial Activity) For the period ending 31 May 2021 LOCAL GOVERNMENT ACT 1995 LOCAL GOVERNMENT (FINANCIAL MANAGEMENT) REGULATIONS 1996 TABLE OF CONTENTS Statement of Financial Activity by Program 3 Statement of Financial Activity by Nature or Type 5 Basis of Preparation 6
Module 4: Financial Statement Analysis Introduction, objectives of financial statement analysis, Techniques-Ratio analysis, Comparative analysis with numerical on the same. Limitations of financial statement analysis .Purpose, use and structure of the Statement of Cash Flows, Preparation of the statement of cash flows as per AS-3.
PROFIT AND NOT-FOR-PROFIT TIER 2 ENTITIES from paragraph OBJECTIVE 1 SCOPE 3 TIER 2 DISCLOSURES Financial Statement Presentation 8 Statement of Financial Position 34 Statement of Profit or Loss and Other Comprehensive Income 48 Statement of Changes in Equity and Statement of Income and Retained Earnings 59 Statement of Cash Flows 64
Personal Financial Statement as of: Individual Statement Joint Statement (Date) PERSONAL INFORMATION Applicant / Borrower Co-Applicant / Co-Borrower . This is a true and accurate statement of my financial condition. Should my financial condition change at any time while I am unde
