southpark homeowners' association number 2 ... - Southpark HOA II

SOUTHPARK HOMEOWNERS' ASSOCIATION NUMBER 2NOTES TO FINANCIAL STATEMENTSDECEMBER 31, 2008NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)RECOGNITION OF ASSETS AND DEPRECIATION POLICY. (Continued)Such property is depreciated using an accelerated method of depreciation over thefollowing useful lives:Furniture and equipment 7 yearsCASH AND CASH EQUIVALENTS POLICY. For purposes of the statement of cashflows, the Association considers all highly liquid debt instruments purchased with amaturity of three months or less to be cash equivalents.ESTIMATES. The preparation of financial statements in conformity with generallyaccepted accounting principles requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the reporting period. Actual results coulddiffer from those estimates.NOTE 3. OWNERS' ASSESSMENTSMonthly assessments to members were $98.00 for the year ended December 31,2008, of which approximately 17% was designated to the replacement fund.The Board determines the annual budget and assessments of owners. The Associationretains excess operating funds at the end of the operating year, if any, for use in futureoperating periods.NOTE 4. FUTURE MAJOR REPAIRS AND REPLACEMENTSThe Association's governing documents require that funds be accumulated for futuremajor repairs and replacements. Accumulated funds are held in separate investmentaccounts and generally are not available for expenditures for normal operations.6