In Florida, there are numerous strategies associations can utilize to fund reserves, but there are two primary methods of calculating annual reserve funding requirements: the component method (straight line or restricted reserves) and the cash flow method (pooled reserves). Funding using the component method was legally required in Florida for decades, meaning reserves were only able to be used for their “authorized purpose” unless approved in advance by the members of the association. Since the administrative code was adjusted in 2002, many associations have adopted the cash flow method, or pooled reserves. So, what are the component and cash flow methods, why would an association choose cash flow, and how do they make the switch?   Read the article…………………………….