{"id":392,"date":"2013-04-17T10:51:53","date_gmt":"2013-04-17T15:51:53","guid":{"rendered":"http:\/\/jaliscocondos.org\/blog\/?p=392"},"modified":"2013-04-17T10:51:53","modified_gmt":"2013-04-17T15:51:53","slug":"your-condos-fiscal-year","status":"publish","type":"post","link":"https:\/\/jaliscocondos.org\/blog\/your-condos-fiscal-year\/","title":{"rendered":"Your Condo’s Fiscal Year"},"content":{"rendered":"

In my book, the \u201cJalisco Condo Manual<\/strong><\/em>,\u201d I say that a condo\u2019s fiscal year should run from April 1 to March 31<\/strong>.<\/p>\n

I get a lot of questions like, \u201cWhere does it say this in the condo law?<\/strong><\/em>\u201d<\/p>\n

It\u2019s Implicit Rather Than Explicit<\/h2>\n

Those of you who\u2019ve asked this are right! There’s nothing in the Civil Code that directly says this<\/strong>. However, in my opinion, this is an implicit requirement, rather than an explicit one.<\/p>\n

Here\u2019s my logic:<\/p>\n

Article 1012.VII<\/strong> of the Civil Code says that the Administrator must give a financial report in the first fifteen days of April, July, October, and January of each year. These are the quarterly reports. Since the financial reporting is clearly expected to be done in calendar quarters, I believe that the intent is that the fiscal year starts at the beginning of one of these quarters. Therefore, your fiscal year should start on the first of April, July, October, or January.<\/p>\n

So… why not January 1st?<\/strong><\/p>\n

Article 1020<\/strong> of the code says that the annual assembly is required to be held in the first three months of the calendar year, and the purpose of this assembly (among others) is to approve the budget for the next fiscal year<\/strong>.<\/p>\n

Assume you want your fiscal year to start on January 1, and you hold your assembly in Mid-March.<\/p>\n

Your last approved budget would have expired on December 31. Since your condo can\u2019t operate without an approved budget, I can\u2019t see how you could legally function in January, February, and March until the assembly. If you do this, you would have been operating with no approved budget for two-and-a-half months, and you would also be approving your budget and fees for this time-period after-the-fact.<\/p>\n

What if the after-the-fact budget didn\u2019t pass, or had to be changed for any reason?<\/p>\n

How do you legally set fees for this first quarter without the approval of an assembly? How can you collect from owners who don\u2019t pay them?<\/p>\n

This logic applies no matter in which of these three months you hold your assembly (January, February, or March), since any of these would be after<\/strong> the start of your fiscal year.<\/p>\n

OK… so why not July 1st or October 1st?<\/strong><\/p>\n

I don\u2019t believe that starting your fiscal year in July or October will have any legal issues, but there are practical considerations.<\/p>\n

Preparing a new budget as close to the end of a fiscal year will always give you more accurate results than preparing one only part way through.<\/p>\n

For example, suppose your fiscal year started on October 1st, and you were voting on your budget for the next year at an annual assembly in February. You would only have about four months of actual expense data on which to base your next budget.<\/p>\n

For these reasons, I believe that the fiscal year should start on April 1<\/strong>. That said, the best person to ask for advice on this is an accountant.<\/p>\n

What about taxes?<\/h2>\n

I’ve heard conflicting reports that Hacienda insists on a tax year that\u2019s the same as the calendar year (or not).<\/p>\n

If this is the case, then it might be possible to have a tax year (for tax accounting purposes) that differs from your fiscal year (for budget and fee purposes). This is common in the US and Canada, but I’m not sure if or how this works in M\u00e9xico.<\/p>\n

If you know for sure, please help…<\/h2>\n

If you do have a definitive and substantiated answer on the fiscal year or the tax year, please share it with the rest of us!<\/p>\n","protected":false},"excerpt":{"rendered":"

In my book, the \u201cJalisco Condo Manual,\u201d I say that a condo\u2019s fiscal year should run from April 1 to March 31. I get a lot of questions like, \u201cWhere does it say this in the condo law?\u201d It\u2019s Implicit Rather Than Explicit Those of you who\u2019ve asked this are right! There’s nothing in the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[37],"class_list":["post-392","post","type-post","status-publish","format-standard","hentry","category-finances","tag-fiscal-year"],"_links":{"self":[{"href":"https:\/\/jaliscocondos.org\/blog\/wp-json\/wp\/v2\/posts\/392","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jaliscocondos.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jaliscocondos.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jaliscocondos.org\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/jaliscocondos.org\/blog\/wp-json\/wp\/v2\/comments?post=392"}],"version-history":[{"count":7,"href":"https:\/\/jaliscocondos.org\/blog\/wp-json\/wp\/v2\/posts\/392\/revisions"}],"predecessor-version":[{"id":399,"href":"https:\/\/jaliscocondos.org\/blog\/wp-json\/wp\/v2\/posts\/392\/revisions\/399"}],"wp:attachment":[{"href":"https:\/\/jaliscocondos.org\/blog\/wp-json\/wp\/v2\/media?parent=392"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jaliscocondos.org\/blog\/wp-json\/wp\/v2\/categories?post=392"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jaliscocondos.org\/blog\/wp-json\/wp\/v2\/tags?post=392"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}