the wrong way to account for partners’ ownership shares

and the two methods used by the smartest firms.

by marc rosenberg
author of how to bring in new partners

regardless of whether it is a corporation or a partnership, there is a substantial amount of accrual basis capital in a cpa firm. all the partners “own” some portion of that capital.

there are at least three methods for determining how much capital each individual partner “owns.” one of them should be avoided like the plague.