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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 113361
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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How does a housing cooperative or other corporation change

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How does a housing cooperative corporation or other corporation change its acrual-form of accounting and other similar matters?

There is no law on how they must do this, as you have likely read. Typically, the entity will make the change at the end of their tax year for their next tax year. This is generally a decision of the board of directors, unless the bylaws specify the members must vote on this, and it is usually based on the recommendation of their accountant. The decision on which method of accounting to use is discretionary to the entity and their accountants as to what is best for the organization.


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Customer: replied 4 years ago.

Paul; If a corporation changed before from a cash-basis form of accounting
to an acrual form, can it switch back to a cash-form relatively easy cash-wise?

Yes, they can change back and forth at any time. It may make a nightmare for the accountant (which is what the accountants for the clients I represent tell me) but they can change to whichever is best for the entity.
Customer: replied 4 years ago.

Paul, "Is it a lot easier for a corporation to change from a cash-basis form of accounting to an acrual form than the other way round?"

Honestly, I can only tell you that the accountants I deal with say it makes no real difference to them, but that is likely their personal opinion and as I am not an accountant I cannot tell you from first hand knowledge.
Customer: replied 4 years ago.


It appears to me that if a housing corporation doesn't buy and sell sell things but just gets monthly income from its shareholders and parking-rental fees from them, and its expenses are only for running that corpration, cash-basis accounting is better than the acrual method of accounting?!

It is certainly the easiest method of accounting, but without reviewing all of the books nobody can really determine which method is best for the organization.

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