NZ567077A - An online rental property financial reporting application and method - Google Patents

Abstract

An online rental property financial reporting application is disclosed. The application is arranged to provide a member access to the application, receive financial data from the member, and allocate the financial data to multiple rental properties associated with the member and to multiple tax entities associated with the member. The member includes a plurality of different tax entities that are the legal owners of one or more of the rental properties.

Description

567077 Our Ref: TCL001 Patents Form No. 5 PATENTS ACT 1953 Complete After Provisional No. 567077 Filed 31 March 2009 COMPLETE SPECIFICATION AN ONLINE RENTAL PROPERTY FINANCIAL REPORTING APPLICATION AND METHOD We, Easy Property Tax.Co.NZ Ltd, d- TCL Accountants Group Ltd, 500 Foxton Shannon Road, RD 13, Foxton, New Zealand, do hereby declare the invention for which we pray that a patent may be granted to us, and the method by which it is to be performed, to be particularly described in and by the following statement: 567077 AN ONLINE RENTAL PROPERTY FINANCIAL REPORTING APPLICATION AND METHOD FIELD OF THE INVENTION The present invention relates to an online rental property financial reporting application and method. In particular, the present invention relates to an online rental property financial reporting application and method wherein financial data may be allocated to multiple rental properties and multiple tax entities, or be used 10 to create a report for a rental property.

BACKGROUND Owners of rental properties keep accounts of their expenses and overheads 15 associated with each of their rental properties in order to offset those costs against their yearly tax payments. In this way they are able to minimise their tax payments according to the applicable tax rules in the country where the property is being rented.

Accounts are manually recorded by writing down in a general ledger using double entry book keeping techniques the relevant financial transactions associated with the rental properties. These values may be used by the owner to prepare their yearly tax return, or be provided to a tax accountant in order for them to prepare the return. However, it is standard practice for each person to keep a record of 25 all their financial transactions associated with their properties in one general ledger.

Financial book keeping computer software is available such as MYOB wherein the user is able to load the software onto their computer systems in order to 30 manage their accounts. However, this software is very generic and is not able to keep accounts specific to rental properties without specific customisation.

Further, this type of software is not able to be used by a single user in order to create accounts for multiple rental properties owned by multiple tax entities associated with the user. Also, this type of software package must be loaded 35 onto the user's computer system resulting in the user only being able to access their accounts using that specific computer. In addition, the user is required to constantly back up their data. •.» ? 567077 3 The present invention aims to overcome, or at least alleviate, some or all of the afore-mentioned problems, or to at least provide the public with a useful choice.

SUMMARY OF THE INVENTION According to one aspect, the present invention provides an online rental property financial reporting application, wherein the application is arranged to: provide a member access to the application, receive financial data from the member, and 10 allocate the financial data to multiple rental properties associated with the member and to multiple tax entities associated with the member, wherein the member includes a plurality of different tax entities that are the legal owners of one or more of the rental properties.

According to yet a further aspect, the present invention provides a computer implemented method of providing an online rental property financial reporting application including the steps of: providing a member access to the application, receiving financial data from the member, and allocating the financial data to multiple rental properties associated with the member and to multiple tax entities 20 associated with the member, wherein the member includes a plurality of different tax entities that are the legal owners of one or more of the rental properties.

BRIEF DESCRIPTION OF THE DRAWINGS Embodiments of the present invention will now be described, by way of example only, with reference to the accompanying drawings, in which: INTELLECTUAL PROPERTY OFFICE OF N.Z. 2 1 JUL 2009 RECEIVED 567077 Figure 1 shows a block diagram of a computing system arranged to host a rental property financial reporting application according to an embodiment of the present invention; Figure 2 shows a screen shot of a 'home' page according to an embodiment of 5 the present invention; Figure 3 shows a screen shot of a 'Maintain Property Owners' page according to an embodiment of the present invention; Figure 4A shows a screen shot of the process of editing a shareholder according to an embodiment of the present invention; Figure 4B shows a further screen shot of the process of editing a shareholder according to an embodiment of the present invention; Figure 4C shows a screen shot of the process of changing the holding value for a shareholder according to an embodiment of the present invention; Figure 4D shows a screen shot of the process of adding a shareholder according 15 to an embodiment of the present invention; Figure 5 shows a screen shot of a 'Maintain Property Details' page according to an embodiment of the present invention; Figure 6 shows a screen shot of an 'Enter Bank Statement Transactions' page according to an embodiment of the present invention; Figure 7 shows a screen shot of an 'Enter Mileage Claim' page according to an embodiment of the present invention; Figure 8 shows a screen shot of an 'Enter Loan Interest' page according to an embodiment of the present invention; Figure 9A shows a first screen shot of a 'Buy or Dispose of Chattels' page 25 according to an embodiment of the present invention; Figure 9B shows a second screen shot of a 'Buy or Dispose of Chattels' page according to an embodiment of the present invention; Figure 10 shows a screen shot of an "Enter Interest and Dividends' page according to an embodiment of the present invention; Figure 11 shows a screen shot of a 'Customize Accounts' page according to an embodiment of the present invention; Figure 12 shows a screen shot of an 'Enter Opening Account Balances' page according to an embodiment of the present invention; Figure 13A shows a first screen shot of a 'Submit Your Accounts' page 35 according to an embodiment of the present invention; 567077 Figure 13B shows a second screen shot of a 'Submit Your Accounts' page according to an embodiment of the present invention; DETAILED DESCRIPTION OF THE INVENTION First Embodiment Figure 1 shows a block diagram of a computing system arranged to host a rental property financial reporting application.

The system includes a computer 101, which may be any suitable computer such as a personal computer with a Windows operating system, for example. The computer 101 is connected to the Internet 103 by any suitable connection, such as via a wireless modem, for example. A web server 105 is also connected to 15 the Internet 103 and has loaded onto it the rental property financial reporting application as herein described. Connected to the server is a database 107 used to store all the information received and used by the reporting application.

In order for a person to access and use the reporting application, they must first 20 register to become a member and set up their accounts. The registration steps essentially collect all the required information in order to enable the member's accounts to be set up. The steps include the applicant providing details of their rental properties, as well as their personal details, such as their name and address. Also, the applicant provides a list of the tax entities that own the rental 25 properties, as well as the tax identification numbers for those tax entities as well as their own tax identification number. The tax identification number is the unique number or code that the tax office uses to identify the entity or applicant. For example, in New Zealand the tax identification number is the entity's IRD (Inland Revenue Department) number. The tax entity type may be, for example, 30 an individual, company or partnership, or trust.

The applicant may enter further information, such as a list of additional persons who should be given access to the information within the reporting application may be provided. The applicant may also indicate for which tax year the 35 information being provided is relevant. A copy of the previous year's rental accounts may be provided. Details of a property purchased during the current 567077 6 tax year may also be provided, where those details may include copies of the sale and purchase agreement, lawyer's settlement statement, lawyer's bill of costs, any valuations that have been undertaken and details of any loans obtained to purchase the property.

Additional information may also be requested during registration of a member. This additional information includes the bank account balances of the various entities for each of the rental properties. The bank account balances provided would usually be the balance at the end of the previous tax year.

As an alternative, details of each entity's bank account may be retrieved automatically and imported into the reporting application by accessing the entity's bank account via the reporting application and downloading the data associated with the bank account in any suitable format, such as CSV (Comma Separated 15 Variable) before entering the data into the database of the reporting application.

All the information provided or entered by the applicant is stored on a database.

It will be understood that, as an alternative, some of the identified information 20 above may be provided or entered into the reporting application after the applicant has become a registered member. The information may be entered by the member themselves or the member may request that an accountant or administrator enters the relevant data based on the information that the member provides.

In this embodiment of the invention, the information entered by the applicant during registration is entered via a separate website to that of the reporting application website. This separate website is responsible for collecting the appropriate fees from the applicant during the application process. However, it 30 will be understood that the same website may be used to receive the initial setup and registration information as well as host the reporting application.

Once the applicant has entered all the required information, they are asked to pay a fee that is dependent on the number of rental properties that the applicant 35 is setting up for use with the reporting application. This fee is charged for each 567077 7 property per tax year. The applicant may set up their accounts to enable the reporting application to operate with one or more rental properties.

Further, the applicant is provided with the terms and conditions associated with 5 the use of the reporting application, which they must agree to in order to become a registered member. A membership engagement form including the terms and conditions are e-mailed to the applicant to enable the applicant to print off and sign the form. Each membership engagement form that is sent to an applicant includes a sequentially numbered code in order to enable the accountancy 10 company to more easily retrieve the data entered by the applicant at the time of registration.

In order for the accounting company operating the reporting application to be able to act for the member it is necessary to obtain from that member legal 15 authority to act. The applicant therefore signs the membership engagement form indicating that they agree to the terms and conditions as well as indicating that they are providing legal authority for the accountancy company to act on their behalf. The membership engagement form is returned to the accountancy company in order for the applicant's account to be set up. For example, the form 20 may be returned by mail, via fax, or scanned and returned via e-mail.

Once the accountancy company receives the membership engagement form, the details provided are accessed by typing in the unique code provided on the membership engagement form. The details are checked using the applicant's 25 details on the tax department's database. For example, the tax codes provided for each tax entity are checked as well as their names, addresses and tax entity status. All the information concerning the rental properties is also entered into the database including each rental property's address, date of purchase, legal description and property type, as well as the details of the member and each of 30 the legal entities associated with each rental property.

Once the account has been set up for the member, they are provided with a username and password to enable them to log on to the website that hosts the reporting application. 567077 8 It will be understood that, as an alternative, the acceptance of the terms and conditions, and the provision of legal authority to act may be provided online by providing a scanned signature online. Further, the tax identification numbers may be automatically retrieved and checked by gaining access to the tax department 5 database and retrieving the tax information associated with the applicant.

The reporting application is made available for use by members over the Internet. That is, the application is accessible online through a member's web browser.

This removes the need for members to install individual programs onto their 10 home computers or laptops from a program that was either downloaded or purchased on a CD-ROM through a store. Due to its online nature, the application thus becomes available for use by the member at any place where they are able to access the Internet, as well as providing the benefit of not requiring the member to create a backup of their data.

A member accesses the reporting application by typing in the URL of the website that hosts the reporting application. The member is asked to enter their username and password. Upon entering this information they are logged in and are then able to provide further information related to each rental property they 20 have registered. The information provided by the member includes financial data associated with at least one of the registered rental properties. This financial data is stored and used to create financial reports that enable the member to view the performance of each rental property. Further, the financial reports may also be provided to the accountancy company operating the application to enable 25 them to create tax returns for the various owners of the rental properties or members, as will be explained in more detail below.

Further, the financial data that is received by the reporting application includes various different financial values associated with each rental property as well as 30 the finances of the entities associated with the member. Each of these financial values are stored in the database and displayed using the reporting application by implementing the methodologies of double entry book keeping.

When the member logs on to use the reporting application they are shown a 35 'home' page as shown in the screen shot of figure 2. On the page they are provided with a drop down list 201 of each of the entities that they have 567077 9 registered. When they select the entity that they want to add data for, a list 203 of the available tax years is provided, and the user selects which year they want to edit. A list 205 of options is provided that includes maintain property owners, maintain property details, enter bank statement transactions, enter mileage, enter 5 loan interest manage my assets, enter interest and dividends and submit my accounts. A check box 207 is also provided for the member to indicate that they have understood the terms and conditions that apply to the application. A 'signout' box 209 is provided to enable the member to log out of the system.

When the member selects the 'maintain property owners' option on the 'home' page they are taken to a property owner's maintenance page.

Figure 3 shows a screen shot of the property owner's maintenance page of the reporting application according to this embodiment.

On the left hand side of the screen is a first menu section 301 that lists the options that are available to each member after they have logged on. The member may click on these options to be taken to the relevant data entry page for that option. The options include a 'setup property owners' option, which is the 20 page that is shown in Figure 3. Further options in the first menu section 301 will be discussed in more detail below, and include customize accounts, opening balances, maintain properties, enter bank transactions, enter loan transactions, enter mileage claim, enter interest and dividends, buy or dispose of chattels, submit annual accounts and reports.

Also on the left hand side of the screen is a second menu section 303 that lists the options that are only visible and available for use by the administrators of the system, such as the accountants. When members log on to the application, they only have the option to select from the first menu section 301. The options in the 30 second menu section include, setup new member, login as member, chart of accounts, enter g/l (general ledger) journals, depreciation, help, users and edit/view common tables. The different options provided here enable a trained accountant to modify the accounts of one of the members in situations where errors have been made during information entry by the member. Further, these 35 options provide the administrators of the system and the accountants to carry out various administrative tasks behind the scenes such as setting up new members; 567077 maintaining a list of available accounts for use by members; entering and amending general ledger data using double entry book keeping methodologies; entering and amending depreciation data; amending help items; amending user details such as their user name, e-mail address and accessibility level of the 5 system, as well as whether the user should be locked out or not; and setting up various codes, tables and lists that are used in the accounts of the members.

The 'setup property owners' link 305 is highlighted to indicate that the member has navigated to this page. The financial year 307 that was previously selected 10 by the member is indicated in the top right hand corner of the page. A list 309 of property owners that have been set up for the member is provided. An add button 311 is provided to enable the member to add a new property owner.

When the member selects one of the property owners in the list 309, that 15 property owner's details are displayed. The details include the legal name 313 of the owner, the trading name 315 of the owner, the entity type 317 of the owner and contact details 319 such as address, telephone, fax and e-mail details.

The entity type may be an individual, a partnership or company, or a trust. The 20 company may be, for example, a LAQC (Loss Attributing Qualifying Company).

Additionally, if the owner is a registered GST (Goods and services tax) entity, the relevant details 321 may be entered including the GST cycle and basis. The IRD number 323 of the owner is displayed along with the bank account number 325 of 25 the owner. If the owner details have been added for a new owner, the button 'Create accounts' 327 will create the new account for that owner and store the owner's details in the database for that member.

A list 329 of the shareholders and partners associated with the property owner is 30 provided indicating their names, date of birth, relationship to the owner, IRD number, bank account number, the relevant holding associated with each shareholder/partner of the property owner and the date of any change made to the holding. If a new shareholder/partner is to be added an add button 331 may be selected and the new details can be entered by the member. If the amount of 35 shares or percentage of ownership of the property owner changes, a change button 333 may be selected to change the holding values. 567077 11 When the member has finished editing or checking the details on this page, they can either sign out using the 'signout' button 335, or select any of the options provided in the first menu section 301.

Figures 4A - 4D show screenshots indicating how to edit the shareholder/partner information.

Figure 4A shows the 'edit' button 401 that the member must click on in order to 10 edit the information.

Figure 4B shows the text boxes that may be edited, such as the name box 403, by the member upon pressing the edit button 401. In order to return to the non-editable page without making any changes, the member may press the return 15 button 405. Upon pressing the tick box 407, any changes made by the member are recorded and stored in the database.

If the member selects the holding change button 333 of figure 3, the image shown in the screenshot of figure 4C is displayed. A text box 409 is provided for 20 the member to enter the new holding value associated with each of the shareholders or partners. The value entered is the number of shares that the shareholder owns. It will be understood that, as an alternative, the number may be a percentage value of the share of the property owner, The date of the change 411 is also recorded. Once the information has been edited, the data is 25 saved to the database by pressing the save button 413. If the member wishes to cancel any changes made, they can do so by pressing the cancel button 415.

If the member selects the add button 331 of figure 3, the image shown in the screenshot of figure 4D is displayed. The member may then add the information 30 for the new shareholder/partner, including their name, date of birth, relationship to the owner, IRD number, bank account number, the relevant holding associated with the shareholder/partner of the property owner and the date any changes were made to the holding value. The available relationships to the property owner are provided in a drop down list 417 and include beneficiary, partner, 35 shareholder and sole trader. 567077 12 When the member selects the 'maintain property details' link shown in figure 2 on the 'home' page, a 'maintain property details' page is shown as indicated in the screen shot in figure 5.

A list 503 of the properties associated with the entity that has been selected from the drop down list 501 is provided. When a property is selected, the property details 505 are displayed, including the physical street address, city, country, owner, legal description of the property, an account sub code associated with the property, the property type and the number of bedrooms the property has. If the 10 member wishes to amend the details they may select any of the drop down lists or type over the text within the text boxes and then click on the select button 507 to save the data in the database.

Further property related options become available to the member when the 15 member places their pointing device over the 'maintain properties' link in the first menu section 301. These options include create a new property, allocate years to properties and sell a property.

If the user selects the option to create a new property, various screens are 20 provided to enable the member to enter all the relevant data for that new property including when the property was purchased, the physical street address of the property, the city and country where the property is located, the owner of the property, the legal description of the property, the property type (such as apartment, flat, house or room) and the number of bedrooms.

Additional information is then provided by the member such as the purchase price, whether the property has a mortgage associated with it and information from the lawyer's settlement statement. Further, other financial data can be entered that is associated with the new property. The different types of financial 30 data that can be added are described in more detail below in the description of the types of bank transaction data that can be entered for the rental properties.

Various financial values can also be added by the member for the new property including the purchase value that is brought forward, valuation values of the land, 35 building and chattels, and the source of those valuations, such as quotable value, rate demand, independent valuer and current book value. Assets and chattel 567077 13 information can also be added by listing each of the assets and chattels associated with the property, such as the description of the buildings and various appliances within the property and their associated values. A drop down list is provided for any assets and chattels for which a depreciation value may be 5 calculated. Also, a method to be used for calculating the depreciation of the chattel or asset may be selected by the member. The methods used to calculate depreciation may include, for example, the straight line method or diminishing value method.

A year may be allocated to each of the properties that have been registered for the member. That is, a tick box may be clicked on by the member in order to indicate which years information is being stored for each of the member's associated properties. The member will be charged for each financial year associated with each property. An option is provided to enable an invoice to be 15 printed.

When a member selects the 'sell a property' link, they can enter all the data associated with the property being sold. This may include the name of the property being sold, the date of sale, the sale price, and the valuations of the 20 chattels, land and building. Any other financial values may also be entered that are associated with the selling of the property and which need to be included in the accounts in order to provide full financial reports.

When the member selects the 'enter bank statement transactions' link shown in 25 figure 2 on the 'home' page, an 'enter bank statement transactions' page is shown as indicated in the screen shot in figure 6.

This page allows the member to enter any financial transactions for each rental property associated with the member, so those transactions can subsequently be 30 used to prepare accurate financial reports associated with the property.

The member selects for which entity the data is being entered from the drop down list as explained above. A bank account 601 is selected. This is the account associated with the transaction that is being recorded. If not already 35 provided, the member can enter the opening date of the account 603 via a drop down calendar, and the opening balance of the account 605 via a free form text 567077 14 box. If the account is being closed, the member can enter the closing date of the account 607 via a drop down calendar and the closing balance of the account 609 via a free form text box.

The member then enters the transactions for the selected bank account. A date 611 is entered via a drop down calendar. The item 613 associated with the transaction is selected via a drop down list. The drop down list includes all items that may cause a transaction associated with the property to occur. Each item is associated with a separate account which is provided with a unique identification 10 code in order to identify it. The code in this embodiment is a numeric code. However, it will be understood that various other code types may be used.

The list includes a large number of different account items such as, for example, accountancy fees, advertising fees, bank fees, cleaning and rubbish removal, 15 insurance, rates, rent received, utility bills, travel bills, profit amounts, transfers, interest paid etc. As the monetary values for these items are entered, their associated account is updated in the database.

The member selects from the property drop down list 615 a property that the 20 financial transaction is to be associated with. That is, the property drop down list provides a list of all the properties associated with the entity that was previously chosen from the entity drop down list.

If the member does not want to allocate the transaction to a specific property, 25 they can decide not to allocate the transaction by selecting an 'unallocated' option from the property drop down list 615.

Also, if the amount being entered is applicable to, or associated with, more than one property, the member can select an option from the drop down list 615 to 30 'split' the amount between two or more properties. When the member selects the split option, an additional data entry fields appears for the member to add the split amount against another property, or to make a portion of the transaction an 'unallocated' transaction. By giving the member different options, this allows them to: a) allocate the whole of the transaction amount to a single specific property, 567077 b) label the whole of the transaction amount as unallocated, i.e. the transaction amount is not associated with any single specific property, c) split the transaction by allocating a portion of the transaction amount to one property, wherein the further portion of the transaction amount is either: i) allocated to a further property, ii) labelled as unallocated, or iii) split further.

Therefore, the member can easily add certain transactions to multiple properties, such as mileage or travel costs for example, when they visit two or more properties.

The member enters a value into the debit box 617 or credit box 619. An updated 15 closing balance and un-reconciled amount 621 is then displayed based on the financial data entered.

Each financial transaction is entered twice using the double entry book keeping methodology as will be well known to person skilled in the art of double entry 20 book keeping. That is, for each transaction, an amount is debited and credited from two different items. This is done automatically by the application as follows.

When an item is entered from the bank account and debited to an expense or chattels account the corresponding credit goes to reduce the bank account 25 balance. When an item is entered as a cash expense the debit goes to the expense account and the credit goes to the selected shareholder/partner current account. When mileage is entered it is allocated to a property or unallocated, the corresponding credit goes to selected shareholder/partner current account.

When the member selects the 'enter mileage' link shown in figure 2 on the 'home' page, an 'enter mileage claim' page is shown as indicated in the screen shot in figure 7.

This page allows the member to enter any mileage data travelled in a vehicle 35 associated with any of the member's rental properties. This data is made 567077 16 available for use by the application to prepare accurate financial reports associated with each property.

The member selects for which entity the mileage data is being entered from the 5 entity drop down list as explained above.

The member selects from a drop down list 701 of shareholders and partners for which person the mileage is being entered. A date 703 is entered, and the relevant property 705 is selected from the drop down list. The member may also 10 choose to have the mileage data unallocated. Also, the member may 'split' the mileage over a number of different properties, or between properties and an unallocated portion. A mileage amount 707 is entered and the balance 709 is shown. The balance 709 is calculated from the previously entered mileage amounts and the maximum claimable mileage 711 for that tax year, which is fixed 15 based on the tax rules of the country in which the properties are being rented.

The system determines the number of allowable kilometres that can be claimed by the selected person and displays this value 713. The number of allowable kilometres is calculated by subtracting the total of already claimed (cumulative) 20 kilometres from the maximum claimable kilometres.

When the member selects the 'enter loan interest' link shown in figure 2 on the 'home' page, an 'enter loan interest' page is shown as indicated in the screen shot in figure 8.

This page allows the member to enter any loan payment data for any of the rental properties associated with the member, this data can subsequently be used to prepare accurate financial reports associated with each property.

The member selects for which entity the loan payment data is being entered from the entity drop down list as explained above.

The member selects from a loan drop down list 801 which of the loans the transaction data being displayed is for.

An opening balance 803 of the loan is displayed. 567077 17 A list 805 of previously entered transactions are displayed indicating the date of the transaction, the transaction type, the loan payment amount, the draw down amount and the balance of the loan account.

These values are automatically retrieved from the member's entered bank account transactions that relate to loan payments. That is, loan payment amounts entered into the member's bank account transactions are automatically populated within this loan transaction account.

It is important to distinguish how much of the loan payment is for interest and how much of the payment is for paying off the principal amount of the loan. If the member's accounts have been set up to indicate that the loan is an interest only loan account, by applying a specific code that relates to interest only loan 15 accounts to that loan account, then there is no requirement to allow the loan amount to be split into interest and principal payments. However, if the loan has been identified as an interest and repayment loan, then it will be required that an indication is made as to how much of the amount paid is for interest and how much of the amount paid is for repayment of the principal amount. In this case, 20 options are provided to the member to allow them to enter how much of the total amount paid is to be directed towards an interest payment, and how much is to be directed towards a repayment of the principal. The member can determine these values based on a summary of the loan account that is sent by the bank identifying how much interest and principal have been paid.

A space is this provided to allow the member to indicate how the loan payment amount is split by entering the date 807 from a drop down calendar, and entering either a principal payment 809 or an interest payment 811 for the payment amount. A closing balance 813 is displayed that is calculated from all the loan 30 transactions that are stored.

When the member selects the 'manage my assets' link shown in figure 2 on the 'home' page, a 'buy or dispose of chattels' page is shown as indicated in the screen shot in figure 9A. 567077 18 This page allows the member to enter and edit any chattel and asset data for any of the rental properties associated with the member, this data can subsequently be used to prepare accurate financial reports associated with each property.

The member selects for which entity the chattel and asset data is being entered from the drop down list as explained above.

A list 901 of chattels and assets is provided. When the member selects one of the items listed, the details 903 for that selected item are displayed. The details 10 include a description of the item, the property to which the item belongs, an identification of the item in terms of it being a depreciation item, a selected depreciation method, a purchase date, a cost price, a date to be sold or disposed of and a sale price if relevant.

Various different depreciation methods may be selected on the screen. By selecting a specific depreciation method, the value of depreciation for the chattel or asset is automatically calculated using that selected method. For example, the depreciation methods include diminishing value calculations and straight line calculations. Each of these methods may also include an option to select an 20 additional 20% depreciation value for new items only.

If the member wishes to add a new asset or chattel, the 'buy' button 905 is selected as shown in figure 9B.

A fresh details box 907 is then displayed to allow the member to include all the information for that chattel or asset, as described above.

In addition, an account box 909 is displayed to allow the member to enter any amounts that were taken from their associated accounts to pay for the chattel or 30 asset. A total box is provided to give a total value of all the amounts entered against each of the accounts listed.

When a chattel or building is sold, it may result in depreciation being recovered. This is taxable and is automatically included as income in the relevant property 35 rental statement. Any portion of the sale price which is not taxable is placed automatically to client equity. 567077 19 If an asset is sold for an amount below its book value, the loss is automatically included as an expense in the relevant property rental account. This does not apply in the case of buildings; a loss on sale is not permitted.

Additional finance data may also be entered using the reporting application. This additional finance data may not be directly associated with any of the member's rental properties. However, the additional finance data may be used for the purpose of completing a tax return at the end of a tax year.

When the member selects the 'enter interest and dividends' link shown in figure 2 on the 'home' page, an 'enter interest and dividends' page is shown as indicated in the screen shot in figure 10.

Various types of interest and dividends may be entered by the member.

New Zealand interest received 1001 may be entered including the date the interest was paid, to which shareholder or partner the interest was paid, the name of the bank or payer that paid the interest, the resident withholding tax amount 20 and the gross interest amount.

Overseas interest received 1003 may be recorded including the date the interest was paid, to which shareholder or partner the interest was paid, the name of the bank or payer that paid the interest, the overseas tax amount, the overseas 25 income amount and the currency in which the amounts are being reported.

New Zealand dividends 1005 received may also be recorded including the date the dividend was paid, to which shareholder or partner the dividend was paid, the name of the company paying the dividend, the investment amount, the 30 imputations credit amount, and the amount of withholding tax.

Overseas dividends 1007 received may also be recorded including the date the dividend was paid, to which shareholder or partner the dividend was paid, the name of the company paying the dividend, the investment amount, the overseas 35 tax amount, the overseas income amount and the currency in which the amounts are being reported. 567077 For each of the described transactions, the member is provided with options from drop down lists to enable them to select or indicate against which of the multiple rental properties and multiple tax entities the financial data is to be allocated.

As can be seen in figure 3, a link on the first menu section enables the member to 'customize accounts'. When the member selects this link they are taken to a screen as depicted in the screenshot shown in figure 11.

The member is provided with a list 1101 of the accounts that have been set up for their use. The member is able to customize these accounts by clicking on the edit button 1103. When the edit button is clicked, the member must then select the 'activate' box 1105 to enable modification of the account name. The requirement to select the edit button prior to selecting the activate box is to 15 reduce the chances of accidentally making changes to the account names. By amending the names of the accounts, the member is able to create a more user friendly name for their accounts so that they are more easily able to understand which accounts they are dealing with.

Further, as can be seen in figure 3, a link on the first menu section enables the member to amend their 'opening balances'. When the member selects this link they are taken to a screen as depicted in the screenshot shown in figure 12.

The member is provided with a display listing the available accounts 1201. The 25 member is then able to enter values in the opening balance box 1203 for any of the accounts that are applicable to them.

The member is able to keep their financial data up to date for each of their rental properties as well as making any necessary changes and amendments 30 throughout the tax year. At the end of the tax year they can select from the first menu section the link 'submit annual accounts'. A 'submit your accounts' page is then displayed as shown in the screenshots of figures 13Aand 13B.

Figure 13A shows a first screen shot indicating the following list of items which 35 the member is asked to tick off by clicking on various tick boxes. 567077 21 A confirmation of bank account balances 1301 as at the end of the tax year is requested. The various balances are displayed and the member is requested to tick the appropriate tick box to confirm that those balances are indeed correct.

A confirmation of assets is requested. A link is provided to an 'asset report', which is the same as the depreciation schedule discussed in more detail below. This report includes a list of the assets associated with the rental properties. If the member is satisfied that all the relevant assets are listed, they tick the appropriate tick box 1303.

A 'number of weeks' value is requested. This value is the number of weeks that the rental property has been rented out, or in other words, the number of weeks of rent that is claimed. It will be understood that, as an alternative to using weeks, any other suitable time period may be used. If the property has been 15 rented out for a full year, then the member should enter '52' into the text box 1305. However, if the property has not been rented out for a whole year, for example, if the owner or their relatives have used the property for a period of time, then this period of time should be deducted from the 52 weeks and the corrected value should be entered. The entered amount is used by the 20 application to automatically re-calculate any overhead expenses for that property where those overhead expenses have been allocated to that property and the overhead expenses are spread throughout the tax year. For example, overheads such as rates, insurance, mortgage interest or depreciation are spread throughout the whole year, and may also be allocated to a single property. It will 25 be understood that other types of financial transaction may also be included on a case by case basis. Thus, if the property is only available for rent 48 weeks of the year, the amounts of the rates and insurance that can be claimed for tax purposes for that property are adjusted by a value of 48/52 to take into account the period that the property was unavailable for rent. That is, the overhead 30 expenses for that period where the property was unavailable for rent are not claimed for tax purposes and those values are automatically adjusted in the member's accounts.

The member is given the option of having depreciation calculated for their assets 35 by ticking a tick box 1307. If the tick box is ticked by the member, the 567077 22 depreciation of their assets and chattels is calculated using the methods that were previously selected for each of the assets and chattels.

The member is then asked to confirm their financial performance by selecting a 5 tick box 1309. An icon is provided that allows the member to view financial performance reports in the form of a combined rental statement, which will be explained in more detail below.

The member may then confirm their financial position by selecting a tick box 10 1311. An icon is provided that allows the member to view a balance sheet in the form of a statement of financial position, which will be explained in more detail below.

The member is also asked to confirm the details of the shareholders or partners 15 and their associated holding value by selecting a tick box 1313.

Further, the member is asked to confirm that they have understood that an accountant should review their accounts if they have made a profit in order to ensure that the minimum allowable amount of tax is paid by clicking on a tick box 20 1315.

A tick box 1317 is also provided to enable the member to purchase use of the application for the next financial year.

If the member requires an accountant to review their accounts in cases where the member is uncertain if the information they have entered has been entered correctly, they can select a tick box 1319 to make this request.

Referring to figure 13B, the member may also purchase a number of further 30 services 1321 by clicking on an available link to be taken to the online shop portion of the system. The further services may include the changing of shareholding values, the handling profit for a company, partnership or trust, requesting an accountant review or purchasing use of the application for the next financial year. 567077 23 The member is then asked to tick a compliance statement tick box 1325 to indicate that the information provided is true and correct and that no information has been left out.

When the boxes have been ticked, the member can select a 'submit account' button to enable the application to create all the reports available and submit these reports to the accounting company in order for them to prepare the tax return for the member.

The reports created by the reporting application include a trial balance, a single rental statement for each rental property, a combined rental statement for all rental properties (if more than one rental property is associated with the member), a rental statement for any unallocated expenses, a financial position report and a depreciation schedule. Each of these reports is created by retrieving 15 the required data for the report from the database for the entity chosen.

The trial balance lists all the debits and credits against each account associated with a specific tax entity. The member is able to see whether any incorrect values have been entered into their accounts by viewing the totals of the credit 20 and debit columns, and seeing whether those totals are the same.

A rental statement for each property associated with the tax entity is also provided. The statement includes a list of all revenue and expenses for each property for the selected financial year, and indicates whether there is a surplus 25 or deficit. If any of the items listed have been rent apportioned due to the property only being available for rent for a portion of the year, then those items are marked with an asterisk.

A rental statement is also provided for any unallocated items that were entered 30 into the accounts. That is, any items that were entered in the category of 'unallocated' and so not associated with a specific property are placed in this statement.

A combined rental statement is provided that combines all the financial data from 35 the separate rental statements for each property and the rental statement for any 567077 24 unallocated items. An indication is made to show whether a surplus or deficit of the accounts exists.

A financial position report in the form of a statement of financial position (or 5 balance sheet) is created by the application. This provides a list of the assets, liabilities as well as equity data.

A depreciation schedule is also provided listing all the assets and chattels for which depreciation is being calculated. Values for the following data types are 10 included where relevant: cost price, previous year's book value, additions or disposals, gains or losses on disposal, capital profit, relevant month, rate of depreciation, amount of depreciation, accumulative amount of depreciation and current year's book value. Value totals for each of these data types are also calculated and provided within the report.

Each of these reports may also be viewed by the member at any time throughout the year by selecting the appropriate link under the reports link on the first menu section 301. This enables the member to see how each of their properties is performing as well as being able to see how their properties are performing as a 20 whole.

When the accountants have been requested to review the member's accounts, they are able to access the data within the accounts by logging on as the member. The accountant's access rights enable them to enter, modify, move or 25 delete data in the accounts in order to place them in order.

Further Embodiments it will be understood that the embodiments of the present invention described 30 herein are by way of example only, and that various changes and modifications may be made without departing from the scope of invention.

It will be further understood that, although it has been described above that the member is responsible for entering various transactions as listed in the first menu 35 section, as an alternative the accountant can carry out any of these functions on behalf of or in conjunction with the member. Also, it will be understood that the 567077 application can control which screens are made available to the member and as such enable the accountant when setting up the system to limit the types of transactions that are able to be entered by the member. For example, certain screens will only be available for an accountant to enter data dependent on the 5 different levels of ability of the member and the practices of the accountancy firm. However, it will be preferred that all screens that are available to a member are also available to the accountant to enable the accountant to modify the data or make any required changes. That is, the accountant is able to access all the options shown on the first menu section. 567077 26

Claims (12)

CLAIMS 10 15 20 25 30

1. An online rental property financial reporting application, wherein the application is arranged to: provide a member access to the application, receive financial data from the member, and allocate the financial data to multiple rental properties associated with the member and to multiple tax entities associated with the member, wherein the member includes a plurality of different tax entities that are the legal owners of one or more of the rental properties.

2. The application of claim 1 wherein the financial data includes mileage data and the application is further arranged to provide an option to allocate the mileage data to multiple categories,

3. The application of claim 1 wherein the financial data includes expenses data and the application is further arranged to provide an option to allocate a single financial transaction associated with the expenses data to multiple categories.

4. The application of claim 2 or 3, wherein the multiple categories include an unallocated category and one or more rental properties.

5. The application of claim 1 wherein the application is arranged to provide the member with a selection to indicate against which of the multiple rental properties and multiple tax entities the financial data is to be allocated.

6. A computer implemented method of providing an online rental property financial reporting application including the steps of: providing a member access to the application, receiving financial data from the member, and allocating the financial data to multiple rental properties associated with the member and to multiple tax entities associated with the member, wherein the member includes a plurality of different tax entities that are the legal owners of one or more of the rental properties. 2 t JUL 2009 received 567077 27

7. The method of claim 6 wherein the financial data includes mileage data and the method further includes the step of providing an option to allocate the mileage data to multiple categories. 5

8. The method of claim 6 wherein the financial data includes expenses data and the method further includes the step of providing an option to allocate a single financial transaction associated with the expenses data to multiple categories. 10

9. The method of claim 7 or 8 wherein the multiple categories include an unallocated category and one or more rental properties.

10. The method of claim 6 further including the step of providing the member with a selection to indicate against which of the multiple rental properties and 15 multiple tax entities the financial data is to be allocated.

11. An online rental property financial reporting application substantially as herein described with reference to the accompanying figures. 20

12. A computer implemented method of providing an online rental property financial reporting application substantially as herein described with reference to the accompanying figures. 25 EASY PROPERTY TAX CO. NZ LTD. f\ By I s Attorneys 30 DOrtHOPKir^f & ASSOCIATES INTELLECTUAL PROPERTY OFFICE OF 2 2 I JUL 2009 R E C EIVED