FAR Partnership

Question 1

How are assets contributed by Partners Valued at date of investment?

Answer 1

They are valued at Fair market value of the net assets, net of any related liabilities

Question 2

What are the methods used to determine partnership Capital accounts?

Answer 2

1. Exact method (Book Value)
2. Bonus Method (Balance in total capital accounts control account allocation)
3. Goodwill method (Going in Investment controls capital account allocation and goodwill calculation