Sample Reserve Study

We prepare reports under Generally Accepted Reserve Study Standards of the ICBI (International Capital Budgeting Institute).  Those standards require that the following items must be included in the "official" reserve study report, which is prepared at a summary level:

  1. Title or cover page
  2. Table of contents
  3. Preparer's report - Describes the work performed
  4. Statement of position - Discloses financial position of reserves at start date of 30-year projection
  5. Cash flow exhibit - Displays cash flows for the entire 30-year projection period
  6. Expenditure exhibit - Displays expenditures for the entire 30-year projection period
  7. Component summary list - Displays components in summary format, generally by category or location
  8. Disclosures - Provides narrative description of matters critical to understanding the reserve study report including summary of significant assumptions
  9. Supplemental FASB disclosures - Presents table of information required by the Financial Accounting Standards Board  (FASB) for all US associations
  10. Supplemental Component list - Lists all individual components.  This exhibit is what allows all ICBI members to also be in compliance with CAI reserve study reporting standards

All reports follow this same structure regardless of size of the association or number of components.  That provides the Clarity, Consistency, and Comparability valued so highly by report users.  While the report structure is the same for all reports, it is the content that makes the difference.

Sample Reserve Study:

This Sample Reserve Study is prepared under International Capital Budgeting Institute standards and is considered the full reserve study report.  Each financial exhibit presents a summary by category.  This summary level reporting serves two functions; it keeps the report small enough so that it is not too intimidating, and it allows the reader to focus on the big picture.  This is a reserve fund study report that is easy to understand and small enough, generally between 18 to 30 pages, regardless of size of association, that it can be easily distributed.  This example report also includes three optional exhibits that are not included or not relevant in all reports:

1) Complete Measurements Report.  This is a digital re-creation of the building that includes complete measurements of siding and roofing, as well as counts on doors and windows, including measurements of each window.

2) Maintenance observations.  This exhibit highlights safety issues noted while on site, and maintenance observations that represent unusual wear and tear or items that represent partial repairs not normally included in full repair or replacement of components.

3) Full Burden Disclosure.  This exhibit highlights the impact of including the very long-lived components that are normally excluded (by instructions from the governing board) from the reserve study.  The classic example is the plumbing inside the walls or under the slab or underground.  This component typically has a useful life of 40 to 60 years (we use 50 years as the average) and the cost is so high that most associations refuse to include this component in the reserve study until it becomes unavoidable.  Reason? The cost is so high it would break the budget.  It literally becomes a planned special assessment from day one.  Example - if the cost is $15,000 per unit (a mid range cost) the members would have to fund $25 per month for 50 years.  Literally no one is willing to do that.  However, as associations reach 35 to 50 years of age, it becomes very important to disclose this information if it is not included in the funding plan.  At Facilities Advisors we are the ONLY reserve study company offering this additional disclosure. 

Sample Supplemental Schedules:

Financial exhibits presenting the details at the component level are generally presented separately from the official report as supplemental schedules.  For those individuals that want to see all the detail supporting the financial exhibits summarized at the component level described above, this is the place to go.  See Sample Supplemental Schedules for the above referenced reserve study. Because the example report is for a relatively small association these schedules total only 57 pages.  For larger associations these same schedules could total hundreds of pages.  The Supplemental schedules can present any information that the preparer or the association want to see as long as these schedules do not contradict the official reserve study report in any way.  Presenting detail level schedules separately from the official report allows the reader to easily determine how much information they want to see.

The Facilities 7 systems includes dozens of different options for reporting.  The Sample Reserve Study above includes exhibits mandated by ICBI reporting standards.  The Supplemental Schedules can be whatever the user wants.  The exhibits we have included above represent the formats most requested by our clients.  Don't see what you want?  Just ask!

 Complete Measurements Report

The Complete Measurements Report is an optional report for condominium associations that is completely separate from the reserve study report.  This report is produced using artificial intelligence software that interprets photos we take on site into a digital and 3-D image.  We have adapted this from a tool used by contractors in obtaining bid information.  The result is that we produce a report that has such exact measurements that it can be used by contractors for bidding jobs on your condominium building such as roofing, painting, window or door replacements.  This simplified example shows five pages of what is typically a 30 to 50 page full report.  However, it does demonstrate the level of detail and precision that is representative of the full report.  Because creating this report does take extra time in the field it is not included in the price of our standard reserve study, but is available as an optional report.  The cost for this service is $150 per building.  On many condominium projects there are buildings that are virtually identical so you don't need to create this report for every building just a single building that is representative of others.  If you are interested in this service, please let us know.