International Capital Budgeting Institute
Generally Accepted Reserve Study Standards ©
Revised July 2020
General Standards
1 - Training and Proficiency – The reserve professional should have a sound understanding of Generally Accepted Reserve Study Principles and Standards for the preparation and presentation of a reserve study.
2 - Knowledge - The reserve professional should have general knowledge of the component subject matter and key factors upon which future results depend for a given reserve study engagement.
3 - Independence – The reserve professional shall be independent of the organization or shall disclose any relationships that may impair independence.
4 - Due Professional Care – The reserve professional shall exercise due professional care and judgment in the performance of procedures and preparation of the reserve study report.
Field Standards
1 - Planning and Supervision – All work shall be properly planned and the work of subordinates, if any, supervised. The reserve professional may rely upon an on-site analysis performed by another individual or company if that work is reviewed and evaluated for reasonableness.
2 - The site analysis shall identify, quantify, and evaluate components included in the reserve study and identify major components not included in the reserve study funding analysis.
3 - The component analysis includes assembly of all information for components included in the reserve study, including useful life, remaining life, and replacement cost.
4 - Evidence and Documentation – The reserve professional shall retain documentation to evidence the procedures performed, findings, and conclusions reached.
5 – The funding plan should be prepared on the cash flow basis considering the organization’s funding goals and ability to finance the funding requirements. A separate funding plan may be prepared and presented to meet regulatory requirements, but it should not be used in place of a funding plan prepared in accordance with Generally Accepted Reserve Study Principles.
Reporting Standards
1 - The Reserve Study Report shall include all report elements as considered necessary for a fair presentation of the relevant material in conformance with Generally Accepted Reserve Study Principles.
2 - Preparer’s Report – The reserve professional’s report shall identify the type of engagement, level of service provided, calculation methods used, statement regarding compliance with software standards, and the preparer’s conclusion of the material presented in conformance with Generally Accepted Reserve Study Principles.
Software Standards – (ICBI software certification requirements)
1 - Software must be capable of making correct calculations of future costs and expenditures including inflation/deflation and one time (non-repeating) expenditures, and future funding amounts including special assessments, interest earned, and income tax calculations in conformance with Generally Accepted Reserve Study Principles.
2 - Software must be capable of performing the three different methods of calculating percent funded in conformance with Generally Accepted Reserve Study Principles.
3 - Software must be capable of producing all reports required by Generally Accepted Reserve Study Principles in an appropriate format.
4 – When performing a timeshare reserve study engagement the preparer must use software meeting timeshare certification requirements that is capable of tracking interior unit component inventory by unit in addition to tracking non unit common area components.