A reserve study (also known as a depreciation report in BC) is a long-range financial planning tool that identifies the current status of the building owners' reserve fund. It also establishes a stable and equitable funding plan to offset the costs of anticipated future major expenditures, such as replacement of roofs and boilers.
In BC, depreciation reports are mandatory for most strata corporations.
The purpose of the reserve study is to ensure that adequate funds are set aside each fiscal year in order for renewal work to be carried out at the appropriate time before asset failure occurs and with minimal financial hardship for the owners.
RDH compiles an inventory of the building's assets, estimates the remaining useful life of each asset, projects the replacement costs in future year dollars, and records these in a cash flow table that displays opening and closing balances in each fiscal year.
RDH’s propriety software for Building Asset Management Services (BAMS) provides dynamic tracking of service life predictions, future cost estimates and reserve fund balances, allowing users to examine multiple funding models.
“I really like the 'Reserve Contribution Increase' feature and your suggestion to have the owners vote on the funding model. It is a real bonus for us as a strata. I just want to reiterate how thankful I am that the BAMS development team added cost sharing ratios to the funding model. It really made the discussion of funding models so much easier. Thanks so much for all your help with this.”
Council Member, Jardine's Lookout, Vancouver