Chapter 14 – Partnership Ownership Changes and Liquidations

TeacherChanges in the ownership structure of a partnership are one of the most important areas related to the operation of a partnership.  Unlike a corporation, changes in the ownership structure of a partnership produce events that require special accounting treatment.  This accounting treatment is heavily influenced by the legal concept of dissolution.  The reason for this is that any time there is a change in the ownership structure, the original partnership is dissolved, and a new partnership is created.

Because the accounting for a partnership is influenced by the proprietary theory, however, measuring changes in the equity of individual partners is a major aspect of partnership accounting.

The changes in the equity of individual partners can come about by the admission of a new partner, the withdrawal of an existing partner, or the ultimate liquidation of the partnership.  Chapter 14 explores these changes.  To find out more, go here (coming soon).