RSM424H1 Lecture Notes - Lecture 15: Retained Earnings
11 Jun 2017
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The partnership interest: the participation of an entity as a partner in a partnership venture is recognized through the ownership of a partnership interest . A partner is considered to own a partnership interest whenever that partner has rights and obligations created by being party to a partnership agreement. The partnership interest is a tradeable asset that can be bought and sold, much like a share of a corporation"s capital stock. This makes it possible to change the participating partners without disturbing the partnership enterprise itself. Thereafter, an unrelated entity can become a partner by: Purchasing a departing partner"s interest, or acquiring a portion of the interest of each remaining partner; or. Contributing cash or specific other assets directly to the partnership in return for a new partnership interest (thereby diluting the earlier partner ratio of participation: conversely, existing partners can depart or diminish their percentage of participation by:
