A great many questions about a condo's figures dissolve as soon as you know which of the two sets of books you are reading. CondoAide keeps two, deliberately, because the law asks for two different things.
The rule in one sentence
The fund register is kept on the cash basis. A co-owner's account is a receivable. The two must reconcile, and must never be added together.
Funds: what the syndicate holds
A fund balance is money actually held. A debit that is pending, failed, cancelled or reversed does not appear in it: no money moved.
This is not a technical shortcut, it is what the law asks for. Article 1071 CCQ requires the contingency fund to be liquid in part, available in the short term, with its capital guaranteed; article 1071.1 CCQ likewise requires a self-insurance fund that is liquid and available in the short term. A fund cannot be inflated by amounts that never arrived.
This covers the fund cards on the Accounting page, the dashboard, the self-insurance fund page, the syndicate certificate, bank reconciliation and the financial statements.
A co-owner's account: what is owed
What each fraction owes, and by when, exists independently of when the money arrives. Article 1072 para. 3 CCQ requires the syndicate to notify each co-owner without delay of the amount of their contributions and the date on which they are due.
The contribution is owed on its due date. A failed debit therefore leaves the receivable unpaid, and that is what CondoAide does.
The distinction has direct legal consequences. Article 2729 CCQ charges the fraction of a co-owner in default for more than 30 days in paying their share of the common expenses. It is acquired only from the registration of a notice in the land register: the 30 days open the right, they do not create the hypothec on their own. What it rests on, though, is the charge owed and not the charge collected.
One reminder: this system only exists once an approved budget has established the amounts due.
The three departures from the cash basis
The notice to reader on your financial statements names them, because an accountant cannot express a view on a framework that is not disclosed:
- unsettled payables are excluded from total expenses and presented separately;
- maintenance costs entered without a linked transaction are included in expenses even though no disbursement occurred;
- the statement of financial position presents receivables (arrears) and accounts payable.
Everything else — fund balances and transaction totals — holds only amounts actually received and disbursed during the year.
Why the balance sheet does not balance
This is the most disconcerting consequence, and it is normal: assets include a receivable, while fund balances are on the cash basis. The two sets do not balance and must not be added together. The statement says so under the table rather than leaving you to work it out.
Money held and money owed do not add up — the same reason a fund balance and a total of arrears answer two different questions.
What the law requires, and what it does not
Article 1105 CCQ requires financial statements accompanied by an accountant's comments on the syndicate's financial situation, and their audit on the demand of co-owners representing 40% of the votes of all the co-owners.
It prescribes no accounting framework. The choice of basis, and the title given to the statements, belong to the syndicate and its accountant — CondoAide only states clearly which basis the figures it produces are on.
Treating cash-basis accounting as a special purpose framework, and the disclosure that goes with it, is a matter of Canadian accounting standards rather than the Civil Code: if your syndicate has its statements reviewed, that is a question for your CPA.