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Stratas in BC › Accounting

Capital Assets

The accounting for capital assets in a non-profit organization is governed by the CICA (Canadian Institute of Chartered Accountants) Handbook section 4400.

Any organization with revenues of less than $500,000 per year does not have to capitalize its capital assets on the balance sheet. But should provide note disclosure of material capital assets: their nature and value.

Prior to the adoption of IFRS, International Financial Reporting Standards, the accounting for capital assets in a condominium or strata corporation was governed by the Canadian Institute of Chartered Accountants, EIC-95 "Accounting for Capital Assets in a Condominium Corporation."  Though, this EIC is no longer found in the Handbook, its principles remain the same. And that is, the corporation should only capitalize assets that have future benefit to the "corporation" through future cash flows, either by future revenues, or avoiding future expenses.

The EIC discussed three types of capital assets:

  1. Common property asset directly associated with the units, for example roofs, and driveways. These are assets essential to the units.

These assets should not be capitalized in the financial statements.           

  1. Common property assets not necessary to the units, for example swimming pools, recreation halls, or a caretaker’s unit.

These assets should be capitalized in the financial statements if the Corporation has paid for, or has title to the assets, and can sell the assets, or generate significant cash flows from their use.

  1. Common property personal assets, purchased, such as snow blowers, and furnishings.

          These assets should be capitalized.