Company consolidating general interest investment partnership
Limited partnership structure is widely used by professional firms, such as law and audit firms, when seeking to raise sufficient capital to support operations and expansion.The structural attributes of a limited partnership bear significant influence over your financial accounting and reporting processes.Treatment to the acquired company: The acquired company records in its books the elimination of its net assets and the receipt of cash, receivables or investment in the acquiring company (if what was received from the transfer included common stock from the purchasing company).The consolidation process allows you to combine the separate financial reports of the entities that your parent company controls.Generally accepted accounting principles automatically grant the control of a limited partnership to the general partner.
General partners are responsible for the management of the business, while limited partners only contribute funds.
This process may be time consuming, particularly for those companies that have many variable interest entities and those that need to apply an entirely new consolidation method to the assessment (e.g., many limited partnerships and investment companies).
In business, consolidation or amalgamation is the merger and acquisition of many smaller companies into much larger ones.
This ASU affects all companies and is effective for calendar year public companies beginning in 2016 and for nonpublic companies in 2017, with early adoption permitted.
This ASU requires companies to reevaluate their consolidation assessments, update their consolidation documentation, and reconsider their conclusion under the revised guidance in the period of adoption.
Unlike general partners, limited partners are not individually liable to the outstanding obligations of the business.