Reinventing the Reserve Study Process
In 2014, ICBI convened an international multidisciplinary committee and instructed them to disregard existing industry practices and redefine the reserve study process from first principles.
The committee included individuals who:
- Perform reserve studies
- Use reserve studies
- Rely on reserve studies
- Represented differing viewpoints
Defining the Reserve Study
The committee reached a foundational conclusion:
A reserve study is not:
- An appraisal
- A property condition assessment
- An engineering study
- A maintenance plan
A reserve study is a budget.
It is the financial reflection of a maintenance program.
It is a financial projection — a financial statement.
This definition reshaped the professional framework.
The Three Required Disciplines
The committee determined that reserve preparation requires competence in three core disciplines:
1. Facilities Maintenance
- Identification and quantification of components
- Evaluation of condition and remaining useful life
- Understanding of maintenance planning
Maintenance knowledge is central because reserve studies support budgeting decisions.
2. Valuation
- Construction cost estimating
- Contractor pricing
- Accounting for self-performed projects
- Direct and indirect cost analysis
3. Financial Skills
- Financial calculations
- Financial modeling
- Financial reporting
Reserve studies must be mathematically sound, logically modeled, and professionally presented.
Reporting Framework
Because a reserve study is a financial projection, ICBI incorporated established financial reporting concepts while adapting them for reserve professionals.
ICBI requires:
- Standardized summary exhibits
- A mandatory preparer’s report
- Required narrative disclosures
- Consistent formatting and order of presentation
Supplemental schedules are permitted, but required exhibits must follow the mandated format.
This promotes:
- Transparency
- Consistency
- Comparability
- Public trust