Client has never isolated deposits in cash account, and they are on accrual . When you look at the history they seldom pay it out never with interest and have always included amounts in rent when received. They recently acquired a Park that had $22,000 of security deposits, when I asked why there was nothing on the seller's financial statement for the previous year end, their accountant said they have never recognized them as a liability - they had also recorded them as rent went received.
As I remember in my State on a State audit security deposits have to set in a separate bank (savings?), and if refunded it needed to have interest paid for the time period held. Usually it is set up in a savings account so interest was prorated, and if none paid the deposit was income then. If not set up in that manor it was rent when received.
Any other ideas or experiences on this subject.