| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
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| #13125 | Closed | public | Multifamily | _General Support |
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We a non-profit HUD entity that is owned by another non-profit entity (we’ll call it the parent). The parent will often pay for fixed assets or capitalized repairs at the HUD property. Often those are not reimbursed by the HUD entity and the capital asset is recorded and depreciated by the parent. Should those be reported by the HUD entity, regardless of whether they funded them or not. If so, what would be the accounting (specifically the HUD REAC account) for the credit side of that entry in the HUD entity? Thank you! |
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Morgan, my answer depends a little on the facts. If the project has a HUD mortgage, HUD would be very interested in having ALL assets recorded at the project. I cannot think of any scenario where they would be happy with project assets being on the books of the parent.
If the project only has a HAP contract, then my answer is a little different. HUD may still care, but will not have any real authority to enforce its wishes. That is generally not possible in a HAP contract.
So, it all depends on what agreements they have.
As for the credit… IF the assets had to go up, to me it would be an investment by the parent, so equity would increase. Not sure what they actually want to do to understand alternatives. For REAC it would be an “Other change in equity” The specific account number would depend on the type of submission.
Les Sparks AHACPA (801) 547-0809
From: AHACPA Support <support@ahacpa.org> |