OUTDOOR RESORTS/PALM SPRINGS OWNERS ASSOCIATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2020 AND 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Outdoor Resorts/Palm Springs Owners Association was organized as a not-for-profit corporation for purposes of maintaining and preserving common property within the development. The development consists of 1,213 recreational veh icle lots located in Cathedral City , California . The Association began its operations in October 1984.
Accounting Method
The Association's governing documents provide certain guidelines for governing its financial activities. To ensure observance of limitations and restrictions on the use of financial resources , the Association maintains its accounts using fund accounting . Financial resources are classified for accounting and reporting purposes in the following funds established according to their nature and purpose:
Operating Fund - This fund is used to account for financial resources available for the general operations of the Association .
Replacement Fund - This fund is used to accumulate financial resources designated for future major repa irs and replacements.
Capital Fund - Th is fund is used to accumulate financial resources designated for the purchase of capital improvements and development of the fitness center.
Cash Equivalents
The Association considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.
Property and Equipment
Personal property and equipment acquired by the Association are recorded at cost and are depreciated over their estimated useful lives using the straight-line method of depreciation. Real property and common areas acquired from the developer and related improvements to such property are not capitalized in the Association's financial statements. Expenditures for major repairs and replacements are accounted for as replacement fund expenditures for purposes of financial reporting .
Inventory
Inventory consists of the bar inventory stated at the lower of cost or market.
Member Assessments
Association members are subject to monthly assessments to provide funds for the Association 's operating expenses, future capital acquisitions, and major repairs and replacements . Assessments receivable at the balance sheet date represent fees due from unit owners. The Association retains legal counsel and places liens on the properties of homeowners whose assessments are del inquent, pursuant to its stated policy . The Association uses the allowance method for estimating uncollectible assessments.
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