Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121341  
Subject: Re: Question On Investment Partnership Accountin Date: 6/17/2014 6:31 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 6
Hi, I’m trying to learn about investment partnership accounting and was wondering if someone might be some expertise in this area.

How should the NAV of a partnership share be calculated to stay fair to partners if they buy or sell at different times? With a tax accrual I’d think? Anything else? Does this get really complicated?

Is anything be done regarding highwater marks if someone joins the fund when there’s currently a shortfall? I.e. Performance is owed to old partners but not to the new one.

Any good articles or resources are welcome too, thanks.


If you're talking about an investment club where the partnership invests in stocks then you want to look at bivio.com and/or myiclub.com for accounting software. Both provide tutorials and free trials. Better Investing (betterinvesting.org) and InvestEd (investEd.org) are national non-profit organizations that provides educational resources for investment clubs.

In general, the accounting is similar (but not identical) to mutual fund accounting. Each contribution of funds to the partnership buys units at the current NAV. The NAV is recalculated in accordance with the partnership agreement which should set the time and manner for determining the NAV. The partnership agreement can specify how income/expenses are allocated to the partners. The most common method is to allocate these items equally to each unit outstanding on that date. This means that the partners with larger ownership shares (more units) get more of the income/expense.

Ira
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Apple

Wal-Mart Nixes Apple Pay
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement