FAR 28 - PARTNERSHIPS

Question 1

At the time a partnership is formed, assets contributed are valued at what basis?

Answer 1

Fair market value

Question 2

Upon new partner admittance, under the bonus method, how will the excess of the new partner’s contribution over the amount credited to the capital account be allocated to the original partners?

Answer 2

Bonus is allocated to the original partners an accordance with their original profit and loss ratio