NAIC CLUB ACCOUNTING CONCEPTS NAIC ACCOUNTING CONCEPTS NAIC

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-1 s 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 – · Value entire portfolio, same day Reconcile with Bank and Broker PRINT VALUATION STATEMENTS – 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!