Balance Sheet

The Balance Sheet details the structure and cost basis of the assets and liabilities of a club. The Total Assets will always equal the Total Liabilities plus Capital of a club.

Here are some of the items you will find on the report:

  • Assets

    Assets include the value of any cash held by the club, excluding petty cash held off the books, plus the cost basis of any investments held by the club as of the report date.

  • Member Capital Accounts

    Member capital account show the value of the the adjusted cost basis of the member's accounts in the club. Adjusted cost basis for each member equals the amount they have paid into the club minus the cost basis of any withdrawals they have taken, plus/minus earnings and expenses that have been allocated to them each year.

  • Unrealized (Gains)/Losses Disbursed

    This is the cumulative result of member withdrawals where the club's cost basis of assets distributed is more or less than the difference between the withdrawing member's adjusted basis before the withdrawal and the member's remaining basis after the withdrawal.

    For example, suppose Member A owns 100 units in the club that have a current unit value of $15. He wants to withdraw completely. Suppose his adjusted cost basis in the club at the time of his withdrawal is $1000. Since this is a total withdrawal, Member A will have a $0 basis remaining after withdrawal.

    Suppose the club gives Member A $500 worth of XYZ stock that has a cost basis to the club of $400. It also gives him an additional $1000 cash to pay off the $1500 withdrawal.

    The club's cost basis of the assets distributed is $400 in stock plus $1000 in cash for a total of $1400. The difference between the club's $1400 cost basis of assets distributed and the withdrawing members $1000 basis withdrawn will be reflected as a $400 unrealized gain that was disbursed.

    Had the club issued Member A $1500 dollars worth of stock that had a cost basis to the club of $500, the result would have been an unrealized loss disbursed of $500.

    Ultimately, when the club dissolves by liquidating its assets and/or transferring its portfolio to its members, this value of Unrealized (Gains) / Losses Disbursed will return to zero, as will all the values on the balance sheet.

  • Unallocated Earnings - (Losses)

    This equals the total of any income, interest, dividends, expenses, or capital gains/losses realized year to date by the club that are not yet shown on the Member status report or reflected in the member cost basis amounts shown in the Capital accounts section. Cost basis is adjusted at the end of each year on each report in accordance with your selected Allocation Method

    A full year Balance Sheet Report will indicate zero under Unallocated Earnings - (Losses). Partial year Balance Sheet Reports will reflect any earnings that have been realized by the club during the year but not yet used to make the adjustments.

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