Partnership Formation and GAAP
Loading...
Author
Scofield, Barbara
Publisher
Washburn University. School of Business
Sponsor
Kaw Valley Bank
Issue Date
August 2018
Rights
Alternative Title
Abstract
This article explains the importance of partnership formation in the U.S. economy, presents the basis for GAAP accounting for partnership formation based on the Codification, and provides a set of teaching materials that illustrate consistent financial reporting for partnership formation. The article discusses accounting controversies in the area of partnership formation and documents limitations in current advanced accounting textbooks that present partnership formation. The typical accounting textbook covers partnership formation lightly and at odds with GAAP-compliant, SEC-reporting partnerships. The issue of the
contribution of net assets versus contribution of a business, as discussed in Nurnberg (2014), is ignored in textbooks, resulting in the misapplication of GAAP when prior businesses are involved in partnership formation.