In one of its final acts, the Urgent Issues Taskforce (UITF) issued new guidance on financial reporting for residential management companies.
The guidance contained in UITF abstract 92 should be adopted for financial periods ending after 31 December 2012, includes help on:
- How residential management companies can determine whether they are acting as principal or agent when undertaking residential service transactions with third parties, and thereby determine which transactions should be recognised in their financial statements;
- Focus on and protect the needs of users of RMC financial statements (including tenants); and
- Assist preparers in fulfilling their statutory duties.
The dearth of definitive guidance for preparing residential management companies accounts has exercised AccountingWEB members operating in this sector for some time and the UITF provoked a swift response in Any Answers, where members debated whether the UITF had lost its way on the topic.
In a subsequent post, Dreamcatcher wanted to clarify the situation for a management company with a year end of 30 June, but a freehold lease requiring service charge accounts to be prepared to 31 March.