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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).

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NAIC CLUB ACCOUNTING CONCEPTS

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  1. NAIC CLUB ACCOUNTING CONCEPTS

  2. 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)

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

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

  9. 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, spin-offs

  10. 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

  11. 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

  12. NAIC CLUB ACCOUNTING CONCEPTS That’s all, folks!

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