Partnership changes - causing a headache and I'm on holiday soon

Posted by Marmite PM | on Wed, 27/07/2011 - 16:55 2569 30 comments | report

I am getting very confused regarding the accounting treatment after a change in partnership shares. The basic premise is that a minority partner is to aquire share from the other partners sufficient to bring parity amongst all the partners. The price for this share has been agreed as the relevant percentage of current assets plus the share of the goodwill (goodwill is however not recognised in the accounts of the partnership and hence does not form part of the capital account)

What are the book keeping transactions if the partner aquiring the addional share does not actually phsically pay any of the other partners or introduce cash into the business - would it be debit minorirty partners capital account the value of the share; credit other partners capital accounts? How does the goodwill effect the postings?

I am sure this is probably quite straight forward - I just need a prompt!

thanks

Comments

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Revaluation a/c

uktaxpal | Wed, 27/07/2011 - 17:59

Price agreed but not paid?

stepurhan | Thu, 28/07/2011 - 10:11

Don't forget that ...

MBK | Thu, 28/07/2011 - 13:17

Credit not forgotten

stepurhan | Fri, 29/07/2011 - 09:37

still confused......

Marmite | Fri, 29/07/2011 - 10:03

No - not quite as regards step 1.

MBK | Fri, 29/07/2011 - 13:04

Loan a/c

uktaxpal | Fri, 29/07/2011 - 16:00

No there shouldn't be a loan account

MBK | Fri, 29/07/2011 - 16:37

Substance over form

uktaxpal | Fri, 29/07/2011 - 17:56

Profit share and right to drawings are two different things.

stepurhan | Sun, 31/07/2011 - 13:37

Minutes/Notes of conversations with client

uktaxpal | Sun, 31/07/2011 - 17:22

The only thing to add to Sepurhan's excellent post...

MBK | Mon, 01/08/2011 - 08:02

LLP or LTD COY?

uktaxpal | Tue, 02/08/2011 - 10:32

Why?

stepurhan | Wed, 03/08/2011 - 08:01

pros v cons

uktaxpal | Wed, 03/08/2011 - 12:38

.

blok | Wed, 03/08/2011 - 13:27

justification?

uktaxpal | Wed, 03/08/2011 - 17:34

.

blok | Wed, 03/08/2011 - 20:59

case proven

uktaxpal | Thu, 04/08/2011 - 09:08

.

blok | Thu, 04/08/2011 - 09:25

Cons of company

stepurhan | Fri, 05/08/2011 - 09:24

mostly disagree

uktaxpal | Fri, 05/08/2011 - 11:13

Disagree how?

stepurhan | Sat, 06/08/2011 - 09:03

don't understand

petersaxton | Sat, 06/08/2011 - 12:19

disagree even more

uktaxpal | Sat, 06/08/2011 - 16:28

.

blok | Sat, 06/08/2011 - 17:22

what

uktaxpal | Mon, 08/08/2011 - 08:57

.

blok | Mon, 08/08/2011 - 09:05

90000 over ten years

uktaxpal | Mon, 08/08/2011 - 12:06

Request for respect

Becky Midgley | Tue, 09/08/2011 - 11:15