Sample NYC Co-op Financial Statements
What do sample co-op financial statements in NYC look like? Who’s responsible for analyzing and doing financial due diligence on your behalf? What can you learn about a building from just its financial statements?
It’s normal to ask for co-op financial statements in NYC as soon as your offer is accepted. Once a deal sheet is sent out your lawyer will typically request the co-op financial statements, co-op board minutes, offering plan, house rules, proprietary lease, sublet policy and purchase application on your behalf. It may be possible to get a copy of the co-op financial statements before submitting an offer if your buyer agent makes the listing agent understand that you are a serious, pre-approved or all cash buyer who has been looking for quite some time.
Once your lawyer has received all of the above mentioned deal documentation, he or she will conduct legal and financial due diligence on your behalf. It’s important to realize that buyers’ agents in NYC are not responsible for financial due diligence. That means your lawyer will be reviewing the co-op financial statements versus your buyer agent. You are free to peruse them yourself, but just know that if you have a good attorney, he or she will already be thoroughly combing through them!
We’ve included a set of shorter than normal sample co-op financial statements below. Please note that these statements can often be much longer in length and substance. Not all co-op financial statements will be audited like this one has been. Please note that you will normally only be provided annual financial statements, meaning that there will always be a lag and you will never be able to see the current financial status of the building as of today.
You may be able to get around this in rare instances by requesting the building’s current year budget or latest monthly financial statement if available. Keep in mind that this unusual request will rarely be granted. You may not even want to ask for this information as you may risk board rejection by appearing to be difficult.
Sample co-op financial statements for a building in Park Slope
FINANCIAL STATEMENTS December 31, 2016
[ADDRESS] OWNERS CORPORATION | [ACCOUNTING FIRM] Certified Public Accountants
TABLE OF CONTENTS
Report Letter — page 3
Statement of Assets, Liabilities and Stockholders’ Equity — Income Tax Basis — page 5
Statement of Revenues and Expenses — Income Tax Basis — page 6
Notes to Financial Statements — page 7
To the Stockholders of [ADDRESS] OWNERS CORPORATION
Independent Auditor’s Report
We have audited the accompanying financial statements of [ADDRESS] OWNERS CORPORATION which comprise the statements of Assets, Liabilities and Stockholders’ Equity — Income Tax Basis as of December 31, 2016, and the related statements of Revenues and Expenses — Income Tax Basis for the years then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with the basis of accounting the Company uses for income tax basis purposes. This includes determining that the income tax basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for 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 appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, 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 a basis for our audit opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of [ADDRESS] CORPORATION as of December 31, 2016, and the results of its operations for the year then ended, in accordance with the basis of accounting the Company uses for income tax purposes described in Note 2.
The Company has not presented the supplementary information about the estimates of future costs of major repairs and replacements that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Financial Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by the missing information.
To see the full sample co-op financial statements in NYC, please visit https://www.hauseit.com/sample-co-op-financial-statements-in-nyc/
Please note: this article is not intended to serve as legal or tax advice. You should consult your lawyer and tax attorney for all aspects of your real estate transaction.