June 6, 2013
UNDERSTANDING ASSOCIATION RESERVES
By: John H. Stroemer, CPA, CFST, CAM, GRI – Managing Partner
We hear one question all the time regarding reserves, “Which method is better Straight-line or Pooling?” There is no clear answer, there are pros and cons to each method. However, many factors contribute when determining which method is best for your Association. The more restricted method is Straight-line, dollars designated for a project can only be used on that project. However, if you want more flexibility “pooled” funds would be better for you. This method also eliminates the need to special assess if you already have dollars reserved.
Please see below a better description and example of each method: