NAIC CLUB ACCOUNTING CONCEPTS

NAIC CLUB ACCOUNTING CONCEPTS

NAIC ACCOUNTING CONCEPTS NAIC Clubs are Partnerships Bookkeeping like a Mutual Fund Total Value of Club determined by last Valuation of club’s portfolio Unit Value is (Total Value of Club) divided by (Total Number of Units)

NAIC ACCOUNTING CONCEPTS (Cont.) Deposits as Payments buy Units Number of Units received for a Payment depends on last Valuation Deposits as Fees buy no Units, become part of Club’s assets Deposits as Petty Cash Contributions not part of Club’s assets

NAIC ACCOUNTING CONCEPTS (Cont.) Partnership law requires year-end distribution of tax liabilities and filing of Federal Form 1065 for club and Schedule K-1s for each member Year-end Distribution of Earnings allocates profits, losses, income, expenses, etc. according to member’s percentage ownership

NAIC ACCOUNTING CONCEPTS (Cont.) NAIC Club Accounting software permits year-end Distribution of Earnings to allocate profits, losses, income, expenses, etc. according to member’s percentage ownership AND according to how long each person was a member

TREASURER’S ACTIVITIES -- BY FREQUENCY - REGULAR DUTIES – Every month or every meeting OCCASIONAL DUTIES – As needed between meetings YEAR-END DUTIES – Close the club’s books at year end – File with the IRS, State

REGULAR DUTIES ENTER MEMBER TRANSACTIONS – Enter Member Payments (Units), Fees (no Units), Petty Cash Contributions ENTER SECURITY TRANSACTIONS – Enter regular DRP purchases, receipts ENTER CASH TRANSACTIONS – Enter interest received, expenses paid

REGULAR DUTIES (Cont.) ENTER MULTIPLE VALUATIONS – RUN AUDIT – Reconcile with Bank and Broker PRINT VALUATION STATEMENTS – Value entire portfolio, same day One per member PRINT MEMBER STATUS REPORTS – One per member

OCCASIONAL DUTIES USE MEMBER TRANSACTIONS TO: – Add new members; do full or partial withdrawals in cash or in stock or in both, prepare Withdrawal Earnings Reports including fees USE SECURITIES TRANSACTIONS TO: – Enter buys, sells, cash dividends, reinvested distributions, splits, mergers, takeovers, spinoffs

YEAR-END DUTIES ENTER ALL DATA UP TO 12/31/XX VALUE ALL SECURITIES ON 12/31/XX – Use values on last trading day of the year RUN AUDIT – Reconcile with Bank and Broker statements DO A DISTRIBUTION OF EARNINGS ON 12/31/XX PRINT A DISTRIBUTION OF EARNINGS REPORT

YEAR-END DUTIES (Cont.) USE FORM 1065/SCHEDULE K-1 PROGRAM – Obtain latest version for previous tax year VERIFY ALL MEMBER SSNs/CLUB TAX I.D. PRINT OUT ONE FORM 1065, FILE WITH IRS – Keep a duplicate for your records PREPARE THREE COPIES OF SCHEDULE K-1 FOR EACH MEMBER – Send one copy of each to the IRS, give one to each member, keep one of each for your records

NAIC CLUB ACCOUNTING CONCEPTS That’s all, folks!