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Coop Negative Equity?

Started by NYCDowntown
over 12 years ago
Posts: 71
Member since: Jul 2009
Discussion about
I live in a well managed coop on the UES. Each year I take 10 minutes to review the financials of the building. The annual depreciation amount is roughly 300K. I see that each year, the shareholder's equity drops by roughly 300K, which is exactly the amount of the depreciation. Just a few years ago, the shareholder's Equity was 3.3M. This year, it dropped to another 300K to 2M. If this continues, in just 6 years or so, the shareholder's equity will be below ZERO! Is this something we should be worried about? Hopefully someone can shed light on this. Thanks!
Response by Eric_14
over 12 years ago
Posts: 93
Member since: Sep 2011

Such are the rules of accounting. The value of your building on those financial reports is its original cost less accumulated depreciation. I bet you'd like to buy it for that. Only if you can buy it for that should you be worried.

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Response by deanc
over 12 years ago
Posts: 407
Member since: Jun 2006

....accounting hijinks. nothing for you to worry about.

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