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Surplus Cash

Mar 27, 2017 05:09PM MDT

We have a HUD 202 project that does not escrow for property insurance. At year end for GAAP purposes there is no accrued insurance. However on April 1 of the following year, they have to pay a large annual insurance premium. If we don't show this payment due on their surplus cash calculation then the property will have to make a deposit to the residual receipts account and will not have the funds to pay the insurance premium. We can't find in the HUD instructions where we can include this insurance payment due April 1 as a deduction from surplus cash.

Any suggestion would be appreciated. Thanks in advance!

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Les Sparks AHACPA Mar 27, 2017

Elizabeth, you certainly do not want to that money to go to residual receipts. I would simply record the money required to go to the escrow payments. this could be done through a journal entry. Alternatively, you could just segregate the money in the surplus cash calculation, either way I fee l completely correct in doing something to keep the money at the project.


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