CONTRIBUTORS | RESERVES
A New Light on Reserve Studies
GARY PORTER
ICBI establishes new standards, procedures and software to create primarily a financial report
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Reserve Studies Faciliies Advisors Hawaii Gary A. Porter, RS, FMP, CPA is a past president of CAI naaonal. We have skills in all three of the disciplines that comprise the reserve study process - no-one else does. Preparing reserve studies since 1982, with Faciliies Advisors, you get: • Experience • Quality service • Compeeeve fee structure • Easy-to-read reports • Internet-Based Sooware We wrote the book on reserve studies “Reserve Studies – The Complete Guide”
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he reserve study industry was effectively born about 40 years ago and has undergone few changes since then. Most associations give little thought to the reserve study, often treating it as a statutory obligation or just trusting that the reserve preparer knows the job and will get it right. But there have always been a number of reserve preparers who said, “We can do better than this.” Failing to gain traction inside the change-resistant mainstream, this group formed the International Capital Budgeting Institute (ICBI) in 2014 to critically examine the reserve study process and to develop standards that would provide better results. They characterized the reserve study report as a financial report, challenging the concepts of most mainstream reserve preparers that it is an engineering study, a maintenance plan, a project condition assessment or an appraisal. The reserve study is a financial projection, a budget. They also identified the three characteristics of financial documents that cause the public to have confidence in those documents: clarity, consistency and comparability, then developed standards to produce those characteristics in reserve studies. ICBI gathered 16 people from six countries, representing every stakeholder group in the community association industry to form the ICBI Standards Committee. The committee challenged the status quo by examining the reserve study process itself and the resulting reserve study report. The committee identified three skill sets representing three separate disciplines that comprise the reserve study process: component skills, valuation skills and financial skills. These skills do not overlap and it is rare that any individual will
We wrote the ICBI reserve study standards Contact us NOW for a free proposal (877) 304-6700 gary@FAIreserves.com www.hawaiireservestudy.com Offices naaonwide
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have high-level knowledge in all three of these disciplines. The component-centric reserve preparers that make up the majority of reserve preparers generally have high components skills but lower skills in the other two disciplines. The ICBI standards were carefully developed to build the calcu-
