Division 3 Preparation and auditing of financial statements

106   Owners corporation must prepare financial statements

(1)  An owners corporation must cause to be prepared financial statements for:

(a)  the period that commences on the date of registration of the strata plan and ends on a date that is not earlier than 2 months before the date of the first annual general meeting, and

(b)  each period that commences on the date up to which those statements were last prepared under this paragraph and ends on a date that is not earlier than 2 months before the next succeeding annual general meeting.

(2)  The financial statements are to comprise only the following matters:

(a)  a statement of income and expenditure for the administrative fund,

(b)  a statement of income and expenditure for the sinking fund.

(3)  Each financial statement must specify the fund, and the period, for which it is prepared.

(4)  If the period is a period referred to in subsection (1), the financial statement for a fund must also specify the following:

(a)  the balance carried forward in the fund from the previous period,

(b)  the particulars and amount of each item of income of the fund received during the current period,

(c)  the particulars and amount of each item of expenditure from the fund during the current period,

(d)  the amount of the contribution to the fund determined for each person liable to make such a contribution,

(e)  the balance outstanding for each such contribution,

(f)  the cash in the fund at the end of the current period,

(g)  the balance of the fund,

(h)  in respect of each liability to contribute to the fund—any unpaid arrears and any balance outstanding,

(i)  the extent to which, at the end of the current period, the fund is in debit or credit.

Note. The financial statements of an owners corporation prepared under this section can deal only with income and expenditure from the administrative and sinking funds and are therefore separate from any other financial statements that might be prepared in relation to the strata scheme, for example, financial statements in relation to the provision of services for a retirement village.

107   Auditing of accounts and financial statements

(1)  An owners corporation may determine that the accounts and financial statements of the owners corporation are to be audited.

(2)  However, the owners corporation of a large strata scheme must ensure that the accounts and financial statements of the owners corporation are audited before presentation to the annual general meeting.

(3)  Any auditing of the accounts and financial statements of an owners corporation under this section must be carried out in accordance with the Australian Auditing Standards, unless the strata scheme concerned comprises not more than 2 lots.