FAR 15 - EQUITY

Question 1

How is an Asset valued when a partner contributes it to a new partnership?

Answer 1

FAIR Value

Increased Partners’ capital account

Question 2

How is a non-asset subject to a liability valued when a partner contributes it to a new partnership?

Answer 2

Asset’s fair value less the present value of liability

Question 3

Are retained earnings decreased when Dividends are declared?

Answer 3

Yes