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GAAP Accounting for Tax Equity Investments in Partnerships and LLCs
Author(s) -
Strobel George L.
Publication year - 2016
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.22173
Subject(s) - equity (law) , business , accounting , finance , cash flow , economics , law , political science
This article takes a very practical approach to the reporting of tax equity investments in partnerships and limited liability companies (LLCs). While generally accepted accounting principles (GAAP) appear to specify the equity method, this article recommends bifurcation of the investment into two pieces, one being the present values of the tax attributes, which should be booked together with the other tax assets, and the second component being the present value of expected cash flows from the investment. © 2016 Wiley Periodicals, Inc.