The Ultimate Guide to Partnership Financial Statements: Simplifying Your Business Finances

Overview of Financial Statement Reporting for Partnerships

Have you ever wondered how partnerships keep their finances in check? Understanding financial statement reporting for partnerships is essential for anyone involved in or considering forming a partnership. In this blog, we’ll break down the essentials of partnership accounting, making it easy to grasp even if you’re not a financial expert. From the different types of partnerships to the importance of financial statements and the legal and tax implications, we’ve got you covered.

Definition and Types of Partnerships: Partnerships come in two main types: General Partnerships and Limited Partnerships. In a General Partnership, all partners share management responsibilities and are personally liable for the business’s debts. A Limited Partnership, on the other hand, includes both general partners, who manage the business and assume liability, and limited partners, who contribute capital but have limited liability and do not participate in management.

Importance of Financial Statements for Partnerships: Financial statements are crucial for partnerships as they provide a clear picture of the business’s financial health. These statements help partners make informed decisions, attract potential investors, and comply with regulatory requirements. Accurate financial reporting ensures transparency and trust among partners and other stakeholders.

Brief Mention of Legal and Tax Implications: Partnerships must navigate various legal and tax implications. Unlike corporations, partnerships do not pay income tax at the entity level. Instead, income is passed through to the partners, who report it on their individual tax returns. Understanding these implications is vital for proper financial management and compliance.

In this blog, we will delve deeper into each of these topics, providing practical insights and tips for effective partnership accounting. Whether you’re a seasoned partner or new to the concept, this guide will help you understand the nuances of financial statement reporting for partnerships.

Understanding Partnerships

Types of Partnerships

General Partnership

Definition and Characteristics: A general partnership is an unincorporated business entity formed by two or more individuals who agree to share in the profits, losses, and management of the business. Each partner contributes assets, skills, or labor, and all partners participate in the day-to-day operations and decision-making processes. This type of partnership is relatively easy to establish, often requiring only an oral or written agreement among the partners.

Joint and Several Liability: One of the defining features of a general partnership is joint and several liability. This means that each partner is individually and collectively responsible for the debts and obligations of the partnership. If the partnership cannot meet its financial obligations, creditors can pursue any or all of the partners to satisfy the debt. This unlimited liability can be a significant risk, as each partner’s personal assets may be at stake.

Limited Partnership

Definition and Characteristics: A limited partnership (LP) consists of one or more general partners who manage the business and are personally liable for its debts, and one or more limited partners who contribute capital but do not participate in management. Limited partners enjoy liability protection up to the amount of their investment. This structure is ideal for investors who want to support the business financially without being involved in its operations.

Limited Liability for Limited Partners: Limited partners in an LP have their liability restricted to the extent of their capital contribution. This means they are not personally responsible for the partnership’s debts beyond their initial investment. However, if a limited partner becomes actively involved in managing the business, they risk losing their limited liability status and may be treated as a general partner.

Differences between General and Limited Partnerships

Liability:

• General Partnership: All partners have unlimited liability, meaning their personal assets can be used to cover the partnership’s debts.
• Limited Partnership: General partners have unlimited liability, while limited partners have liability only up to their capital contribution.

Management:

• General Partnership: All partners participate in the management and decision-making process.
• Limited Partnership: Only general partners manage the business, while limited partners are passive investors who do not engage in day-to-day operations.

Formation:

• General Partnership: Easier to form with minimal legal requirements, often based on an oral or written agreement.
• Limited Partnership: Requires a formal agreement and registration with provincial authorities, including filing a certificate of limited partnership.

Risk and Reward:

• General Partnership: Higher personal risk due to unlimited liability, but partners have full control over the business and its profits.
• Limited Partnership: Lower risk for limited partners due to liability protection, but they have no control over business operations and decision-making.

Understanding these fundamental differences can help individuals and businesses choose the appropriate partnership structure that aligns with their risk tolerance, management preferences, and investment goals.

 

Financial Statement Reporting for Partnerships

Income Statement

Structure and Components

The income statement for a partnership follows a similar structure to that of other business entities but includes specific elements that cater to the unique nature of partnerships. The primary components of a partnership income statement include:

1. Revenue:
   • Total income generated from the partnership’s core business activities.
   • Includes sales revenue, service revenue, and any other operational income.
2. Cost of Goods Sold (COGS):
   • Direct costs attributable to the production of goods sold by the partnership.
   • Includes raw materials, direct labor, and manufacturing overhead.
3. Gross Profit:
   • Calculated as Revenue minus Cost of Goods Sold.
   • Indicates the profitability of the partnership’s core business activities.
4. Operating Expenses:
   • Expenses incurred in the day-to-day operations of the partnership.
   • Includes salaries and wages, rent, utilities, marketing, and administrative expenses.
5. Operating Income:
   • Calculated as Gross Profit minus Operating Expenses.
   • Reflects the partnership’s profit from regular business operations.
6. Other Income and Expenses:
   • Includes non-operational income and expenses such as interest income, interest expense, gains or losses on asset sales, and other miscellaneous items.
7. Net Income Before Tax:
   • Calculated as Operating Income plus Other Income and minus Other Expenses.
   • Represents the partnership’s profit before income taxes are considered.
8. Income Tax Expense:
   • Unlike corporations, partnerships do not pay income tax at the entity level. Instead, the partnership’s net income is passed through to the partners and taxed at their individual rates.
   • This section may include tax provisions related to certain income or expenses, but typically, the partnership itself does not report an income tax expense.
9. Net Income:
   • The final line of the income statement, representing the total profit or loss of the partnership for the reporting period.

Distribution of Net Income Among Partners

One of the unique aspects of a partnership’s income statement is the distribution of net income among the partners. This distribution is based on the terms outlined in the partnership agreement and reflects each partner’s share of the profits or losses.

1. Profit-Sharing Ratio:
   • The partnership agreement specifies the profit-sharing ratio, which determines how net income is allocated among the partners.
   • The ratio can be equal or based on the partners’ capital contributions, roles, or other agreed-upon criteria.
2. Calculation of Each Partner’s Share:
   • The net income of the partnership is multiplied by each partner’s profit-sharing percentage to determine their share of the profits or losses.
   • Example: If the partnership’s net income is $100,000 and Partner A and Partner B share profits equally, each partner would receive $50,000.
3. Allocation Entries:
   • The allocation of net income is recorded in the partnership’s accounting records.
   • Journal Entry Example:

Income Summary                100,000

   Partner A, Capital                   50,000

   Partner B, Capital                   50,000

1. Impact on Partners’ Capital Accounts:
   • Each partner’s share of net income is credited to their respective capital accounts, increasing their equity in the partnership.
   • Conversely, any losses would be debited to their capital accounts, reducing their equity.
2. Drawings and Withdrawals:
   • Partners may withdraw funds from their capital accounts, which are recorded separately as drawings.
   • Drawings do not affect the net income but reduce the capital account balance.

By accurately reporting and distributing net income, the partnership ensures transparency and fairness in financial dealings among partners. This process is crucial for maintaining trust and harmony within the partnership and for meeting legal and tax obligations under Canadian GAAP.

 

Balance Sheet

Partners’ Equity Section

The partners’ equity section of a partnership’s balance sheet is distinct from that of a corporation. Instead of shareholders’ equity, a partnership’s equity is represented by the capital accounts of the individual partners. This section provides a clear view of each partner’s stake in the partnership, reflecting their contributions, share of profits, and withdrawals.

Structure of the Partners’ Equity Section:

1. Capital Accounts:
   • Each partner has a separate capital account.
   • The capital accounts reflect initial contributions, additional contributions, allocated net income or loss, and withdrawals or distributions.
2. Total Partners’ Equity:
   • The sum of all individual capital accounts.
   • Represents the total equity held by all partners in the partnership.
3. Accumulated Earnings:
   • A sub-section showing cumulative earnings that have been retained in the business rather than distributed to partners.
   • Typically integrated into the individual capital accounts rather than presented separately.

Detailing Individual Partner’s Capital Accounts

Each partner’s capital account provides a detailed record of their financial interactions with the partnership. This account is crucial for tracking contributions, profit allocations, and withdrawals. The detailed breakdown ensures transparency and accuracy in reflecting each partner’s financial position within the partnership.

Components of a Partner’s Capital Account:

1. Initial Contributions:
   • The initial amount contributed by each partner when the partnership was formed.
   • Can include cash, property, or other assets.
2. Additional Contributions:
   • Any additional capital invested by the partners after the initial formation.
   • These contributions increase the partner’s equity in the partnership.
3. Allocated Net Income or Loss:
   • Each partner’s share of the net income or loss for the reporting period, based on the profit-sharing ratio specified in the partnership agreement.
   • Net income increases the capital account, while net losses decrease it.
4. Withdrawals/Drawings:
   • Any amounts withdrawn by partners during the reporting period.
   • Withdrawals are debited to the capital account and reduce the partner’s equity.
   • Separate drawings accounts are often maintained to track withdrawals before they are closed to the capital accounts at the end of the period.
5. Closing Balance:
   • The ending balance of the capital account at the reporting date.
   • This balance represents the cumulative total of all contributions, allocated profits or losses, and withdrawals.

Example of a Partner’s Capital Account:

Let’s consider a partnership with two partners, Partner A and Partner B. Here’s how their capital accounts might be detailed on the balance sheet:

Partner A’s Capital Account:

Opening Balance (January 1, 2024)                  $100,000

Add: Additional Contribution (March 1, 2024)      $20,000

Add: Share of Net Income (2024)                      $30,000

Less: Withdrawals (June 1, 2024)                     $10,000

Closing Balance (December 31, 2024)               $140,000

Partner B’s Capital Account:

Opening Balance (January 1, 2024)                  $150,000

Add: Share of Net Income (2024)                      $30,000

Less: Withdrawals (August 1, 2024)                    $20,000

Closing Balance (December 31, 2024)               $160,000

Total Partners’ Equity:

Partner A, Capital                                $140,000

Partner B, Capital                                $160,000

Total Partners’ Equity                            $300,000

Presentation in the Balance Sheet:

Balance Sheet (as of December 31, 2024):

Assets:

• Current Assets
• Non-Current Assets

Liabilities:

• Current Liabilities
• Non-Current Liabilities

Partners’ Equity:

Partner A, Capital                                $140,000

Partner B, Capital                                $160,000

Total Partners’ Equity                            $300,000

This detailed approach to the partners’ equity section and individual capital accounts ensures that each partner’s financial involvement is clearly documented and transparently presented. It aligns with Canadian GAAP, providing a true and fair view of the partnership’s financial position and fostering trust and accountability among partners.

 

Cash Flow Statement

The cash flow statement is a crucial financial document that tracks the cash inflows and outflows of a partnership over a specific period. It provides insights into the partnership’s liquidity, financial flexibility, and overall cash management. This statement is divided into three main sections: Operating Activities, Investing Activities, and Financing Activities.

Tracking Partnership’s Cash Inflows and Outflows

1. Operating Activities:

• Cash Inflows:
  • Cash receipts from sales of goods or services.
  • Cash received from interest and dividends.
  • Other cash receipts related to operating activities.
• Cash Outflows:
  • Cash payments to suppliers for goods and services.
  • Cash payments to and on behalf of employees.
  • Cash payments for operating expenses such as rent, utilities, and insurance.
  • Other cash payments related to operating activities.

Example:

Cash Flows from Operating Activities:

   Cash receipts from customers                       $150,000

   Cash payments to suppliers and employees          ($100,000)

   Cash payments for operating expenses               ($20,000)

   Net cash provided by operating activities          $30,000

2. Investing Activities:

• Cash Inflows:
  • Cash receipts from sales of property, plant, and equipment.
  • Cash receipts from sales of investments.
  • Other cash receipts from investing activities.
• Cash Outflows:
  • Cash payments to acquire property, plant, and equipment.
  • Cash payments to acquire investments.
  • Other cash payments for investing activities.

Example:

Cash Flows from Investing Activities:

   Cash receipts from sale of equipment                 $10,000

   Cash payments for purchase of equipment             ($25,000)

   Net cash used in investing activities               ($15,000)

3. Financing Activities:

• Cash Inflows:
  • Cash contributions from partners.
  • Cash proceeds from borrowing.
• Cash Outflows:
  • Cash withdrawals by partners.
  • Cash repayments of borrowed amounts.
  • Other cash payments related to financing activities.

Example:

Cash Flows from Financing Activities:

   Cash contributions from partners                     $20,000

   Cash withdrawals by partners                         ($15,000)

   Net cash provided by financing activities             $5,000

Specific Considerations for Partnerships

1. Partner Contributions and Withdrawals:

• Partner contributions and withdrawals are significant components of the cash flow statement for partnerships. These transactions are reported in the financing activities section.
• Contributions increase the partnership’s cash flow, while withdrawals reduce it. Detailed tracking is essential to ensure accurate reporting and transparency.

2. Allocation of Net Income:

• Although net income allocation does not directly affect cash flows, it influences partners’ decisions regarding withdrawals and reinvestment in the partnership.
• Partnerships must carefully manage cash distributions to partners to maintain sufficient liquidity for operations and growth.

3. Non-Cash Transactions:

• Certain partnership transactions may not involve cash, such as the conversion of a partner’s loan into equity. These non-cash transactions should be disclosed separately in the notes to the financial statements.
• Accurate disclosure ensures that stakeholders understand the full financial picture of the partnership.

4. Managing Cash Reserves:

• Partnerships often maintain cash reserves to meet unexpected expenses or investment opportunities. Effective cash flow management involves balancing operational needs with maintaining adequate reserves.
• Periodic reviews and cash flow forecasts help in making informed decisions about cash management.

Example of a Cash Flow Statement for a Partnership:

Cash Flow Statement (Year Ended December 31, 2024):

 

Cash Flows from Operating Activities:

   Cash receipts from customers                       $150,000

   Cash payments to suppliers and employees          ($100,000)

   Cash payments for operating expenses               ($20,000)

   Net cash provided by operating activities          $30,000

 

Cash Flows from Investing Activities:

   Cash receipts from sale of equipment                $10,000

   Cash payments for purchase of equipment            ($25,000)

   Net cash used in investing activities              ($15,000)

 

Cash Flows from Financing Activities:

   Cash contributions from partners                    $20,000

   Cash withdrawals by partners                        ($15,000)

   Net cash provided by financing activities            $5,000

 

Net Increase in Cash and Cash Equivalents              $20,000

Cash and Cash Equivalents at Beginning of Year         $10,000

Cash and Cash Equivalents at End of Year               $30,000

This structured approach to tracking cash flows ensures that partnerships can effectively manage their financial resources, meet operational needs, and plan for future growth. By understanding and accurately reporting cash inflows and outflows, partnerships can maintain financial stability and demonstrate their financial health to stakeholders.

 

Differences Between Partnerships and Corporations

Legal Structure and Liability

Liability Differences: Unlimited vs. Limited Liability

Partnerships:

• Unlimited Liability: In a general partnership, each partner is personally liable for the debts and obligations of the partnership. This means that if the partnership cannot meet its financial obligations, creditors can pursue the personal assets of any or all partners to satisfy the debt. This type of liability is known as joint and several liability.
• Limited Partnerships: While general partners in a limited partnership also face unlimited liability, limited partners have liability restricted to their investment in the partnership. Limited partners do not participate in the management of the business to maintain their limited liability status.

Corporations:

• Limited Liability: Corporations offer limited liability protection to their shareholders. This means that shareholders are only liable up to the amount they have invested in the corporation. Personal assets of the shareholders are protected from the corporation’s creditors, which significantly reduces the financial risk to investors.

Implications for Financial Reporting:

• Partnerships: The unlimited liability in partnerships necessitates detailed and transparent financial reporting to ensure that partners are fully aware of the financial health and obligations of the business. Financial statements must clearly delineate the partners’ equity, contributions, and distributions.
• Corporations: Limited liability allows for a more straightforward approach to financial reporting, focusing on the financial performance and position of the corporation as a separate legal entity. Shareholders’ equity is reported, showing capital contributions and retained earnings without directly linking to the personal liability of shareholders.

Taxation

Pass-Through Taxation for Partnerships

Partnerships:

• Pass-Through Taxation: One of the defining features of partnership taxation is the concept of pass-through taxation. This means that the partnership itself does not pay income tax. Instead, the partnership’s income, losses, deductions, and credits are passed through to the individual partners, who report these amounts on their personal tax returns. Each partner is taxed on their share of the partnership’s income, regardless of whether the income is actually distributed to them.
• Tax Reporting: Partnerships must file an information return (such as the T5013 in Canada) to report the income, deductions, and other tax-related information of the partnership. Each partner then receives a slip (T5013 slip) detailing their share of the partnership’s income and expenses for inclusion in their personal tax return.

Corporate Tax Obligations for Corporations

Corporations:

• Corporate Tax: Corporations are treated as separate legal entities for tax purposes and are subject to corporate income tax on their profits. This taxation occurs at the corporate level before any profits are distributed to shareholders as dividends.
• Double Taxation: One of the main drawbacks of the corporate tax structure is the potential for double taxation. Profits are taxed at the corporate level, and when these profits are distributed as dividends to shareholders, they are taxed again at the individual level. Various mechanisms, such as the dividend tax credit in Canada, exist to mitigate this double taxation effect.
• Tax Reporting: Corporations must file annual corporate income tax returns (such as the T2 in Canada), detailing their income, expenses, and taxes owed. Additionally, corporations may have other tax obligations, such as payroll taxes, sales taxes, and excise taxes.

Equity Structure

Partners’ Capital Accounts vs. Shareholders’ Equity

Partnerships:

• Partners’ Capital Accounts: In a partnership, each partner has a capital account that tracks their equity in the partnership. This account records the initial and additional contributions made by the partner, their share of the partnership’s net income or loss, and any withdrawals or distributions taken by the partner. The balance of the capital account reflects the partner’s current equity stake in the partnership.
  • Initial Contributions: The amount initially invested by each partner.
  • Additional Contributions: Any further investments made after the initial contribution.
  • Net Income Allocation: Each partner’s share of the profits or losses for the period.
  • Withdrawals: Amounts taken out by partners, reducing their capital account balance.

Corporations:

• Shareholders’ Equity: The equity structure of a corporation is more complex and includes several components such as common stock, preferred stock, additional paid-in capital, retained earnings, and treasury stock. Shareholders’ equity represents the residual interest in the assets of the corporation after deducting liabilities.
  • Common Stock: The par value of shares issued to shareholders.
  • Preferred Stock: Equity instruments with preferential rights over common stock, such as fixed dividends.
  • Additional Paid-In Capital: The excess amount paid by investors over the par value of the shares.
  • Retained Earnings: Accumulated profits that have not been distributed as dividends but are retained in the business for reinvestment.
  • Treasury Stock: Shares that have been repurchased by the corporation and are held in the company’s treasury.

Reporting Contributions, Withdrawals, and Profit Sharing

Partnerships:

• Contributions: Partners’ contributions are recorded as increases to their individual capital accounts. Contributions can be in the form of cash, property, or services.
• Withdrawals: Withdrawals by partners are recorded as debits to their capital accounts. These transactions reduce the partner’s equity in the partnership.
• Profit Sharing: Profits or losses are allocated to partners based on the profit-sharing ratio specified in the partnership agreement. These allocations are credited to the partners’ capital accounts, increasing their equity for profits and decreasing it for losses.

Corporations:

• Contributions: Shareholders contribute capital by purchasing shares of stock. These contributions are recorded in the equity section of the balance sheet, under common stock and additional paid-in capital.
• Dividends: Corporations distribute profits to shareholders in the form of dividends. Dividends are declared by the board of directors and paid out of retained earnings. The payment of dividends reduces retained earnings but does not affect the initial capital contribution.
• Profit Retention: Profits not distributed as dividends are retained in the business and reported as retained earnings. Retained earnings reflect the cumulative profits that have been reinvested in the corporation rather than distributed to shareholders.

Conclusion

Understanding the differences between partnerships and corporations is crucial for choosing the right business structure and ensuring proper financial management and reporting. Partnerships offer flexibility and pass-through taxation but come with unlimited liability for general partners. Corporations provide limited liability protection and a more formal equity structure but face double taxation on profits. Each structure has its own implications for financial reporting, taxation, and equity management, making it essential to consider the specific needs and goals of the business when deciding between a partnership and a corporation. By comprehensively understanding these differences, business owners can make informed decisions that align with their strategic objectives and financial requirements.

 

Bookkeeping for Partnerships

Setting Up Partnership Accounts

Effective bookkeeping for partnerships involves setting up and maintaining comprehensive accounts that accurately reflect each partner’s financial involvement and the overall financial health of the partnership. The key accounts to establish include partner capital accounts and drawing accounts.

Partner Capital Accounts

Definition and Purpose:

• Partner capital accounts are individual accounts for each partner that track their equity in the partnership.
• These accounts record the initial and additional contributions made by partners, their share of the profits or losses, and any withdrawals or distributions.

Components:

1. Initial Contributions: The amount each partner invests when the partnership is formed. This can be cash, property, or services.
2. Additional Contributions: Further investments made by partners after the initial setup.
3. Allocated Net Income/Loss: Each partner’s share of the partnership’s profits or losses, allocated according to the partnership agreement.
4. Withdrawals/Distributions: Amounts taken out by partners, reducing their capital account balances.

Example:

Partner A’s Capital Account

Opening Balance (Initial Contribution): $50,000

Additional Contribution:               $10,000

Share of Net Income:                   $15,000

Withdrawals:                           $5,000

Closing Balance:                       $70,000

Drawing Accounts

Definition and Purpose:

• Drawing accounts track the amounts withdrawn by each partner during a specific period.
• These accounts are debited when partners withdraw funds from the partnership and are closed to the capital accounts at the end of the financial period.

Components:

1. Withdrawals: Cash or other assets taken out by partners.
2. Adjustments: Any corrections or reallocations made during the period.

Example:

Partner B’s Drawing Account

Withdrawals:                           $10,000

Adjusted Withdrawals:                  $2,000

Total Withdrawals:                     $12,000

Recording Transactions

Properly recording transactions is essential for maintaining accurate financial records and ensuring transparency in the partnership. Key transactions include investments and contributions by partners, the allocation of profits and losses, and partner withdrawals and distributions.

Investments and Contributions by Partners

Recording Initial Contributions:

• When a partner makes an initial contribution, it is recorded in the partner’s capital account at the fair market value of the contributed assets.

Journal Entry Example:

Cash                          $50,000

   Partner A, Capital              $50,000

Recording Additional Contributions:

• Additional contributions are similarly recorded in the partner’s capital account.

Journal Entry Example:

Cash                          $10,000

   Partner B, Capital              $10,000

Allocation of Profits and Losses

Determining Allocation:

• Profits and losses are allocated based on the profit-sharing ratio specified in the partnership agreement. This ratio could be equal or vary based on each partner’s investment, role, or other criteria.

Recording Allocations:

• At the end of the financial period, the net income or loss is allocated to each partner’s capital account.

Journal Entry Example:

Income Summary                  $30,000

   Partner A, Capital               $15,000

   Partner B, Capital               $15,000

• If the partnership incurs a loss, the allocation is recorded as follows:

Journal Entry Example:

Partner A, Capital               $10,000

Partner B, Capital               $10,000

   Income Summary                  $20,000

Partner Withdrawals and Distributions

Recording Withdrawals:

• Withdrawals by partners are first recorded in the drawing accounts and then closed to the capital accounts at the end of the period.

Journal Entry Example for Withdrawal:

Partner B, Drawings               $5,000

   Cash                              $5,000

Closing Drawings to Capital Accounts:

• At the end of the financial period, drawing accounts are closed to the respective capital accounts to reflect the reduced equity.

Journal Entry Example for Closing Drawings:

Partner B, Capital                $5,000

   Partner B, Drawings               $5,000

Distributions:

• If the partnership distributes profits to partners, these distributions are recorded similarly to withdrawals, affecting the partner’s capital accounts.

Journal Entry Example for Distribution:

Partner A, Capital                $10,000

Partner B, Capital                $10,000

   Cash                             $20,000

Conclusion

Bookkeeping for partnerships requires meticulous attention to detail and accurate recording of financial transactions to maintain transparency and ensure the financial integrity of the business. By setting up and managing partner capital accounts and drawing accounts, and carefully recording investments, contributions, allocations of profits and losses, and withdrawals, partnerships can provide clear and accurate financial information to their partners. This transparency helps in building trust among partners and ensures compliance with legal and financial reporting requirements. Proper bookkeeping practices also facilitate better financial decision-making, contributing to the partnership’s overall success.

 

Specific Transactions in Partnerships

Contribution of Property

When partners contribute property to a partnership, it is essential to account for these transactions accurately to reflect the true value of the partnership’s assets and ensure compliance with tax regulations.

Accounting for Contributions at Fair Market Value

Fair Market Value:

• Contributions of property by partners are generally recorded at the fair market value (FMV) of the property at the time of the contribution. The FMV is the price at which the property would change hands between a willing buyer and a willing seller, both having reasonable knowledge of the relevant facts and neither being under any compulsion to buy or sell.

Recording the Contribution:

• When property is contributed, the partnership records the property as an asset at its FMV, and the contributing partner’s capital account is credited by the same amount to reflect their equity contribution.

Journal Entry Example:

Equipment                        $25,000

   Partner A, Capital                $25,000

In this example, if Partner A contributes equipment valued at $25,000, the equipment is recorded as an asset, and Partner A’s capital account is credited by the same amount.

Tax Implications and Elections for Income Tax Purposes

Disposition and Acquisition:

• For tax purposes, the contribution of property is considered a disposition by the partner and an acquisition by the partnership. This means the partner may have to recognize a gain or loss on the disposition if the FMV of the property differs from its adjusted cost base (ACB).

Tax Deferral Election:

• To avoid immediate tax consequences, partners and the partnership can elect to transfer the property at its tax cost rather than its FMV. This is done under specific provisions of the Income Tax Act (Canada), such as the section 97(2) election. This election allows the partnership to take over the partner’s ACB of the property, deferring any capital gain or recapture of depreciation until the property is later disposed of by the partnership.

Making the Election:

• To make this election, both the contributing partner and the partnership must file a joint election with their tax returns for the year of the contribution. This election must include detailed information about the property and its ACB.

Example of Section 97(2) Election: If Partner B contributes property with an FMV of $50,000 and an ACB of $30,000, without the election, Partner B would recognize a capital gain of $20,000 ($50,000 – $30,000). By electing under section 97(2), the property is transferred at its ACB of $30,000, and no immediate gain is recognized.

Withdrawal of Property

When a partner withdraws property from the partnership, it is crucial to account for these transactions at fair value and consider any applicable sales taxes.

Recording Withdrawals at Fair Value

Fair Value:

• Withdrawals of property by a partner are recorded at the property’s fair value at the time of withdrawal. This ensures that the partnership’s financial statements reflect the true economic impact of the withdrawal.

Journal Entry Example:

Partner B, Drawings                $15,000

   Inventory                           $15,000

In this example, if Partner B withdraws inventory worth $15,000, the inventory is removed from the partnership’s books at its fair value, and Partner B’s drawings account is debited by the same amount.

Impact on Capital Account:

• At the end of the period, the drawings account is closed to the partner’s capital account, reducing their equity in the partnership.

Journal Entry Example for Closing Drawings:

Partner B, Capital                  $15,000

   Partner B, Drawings                  $15,000

Sales Taxes Considerations

Sales Tax on Withdrawals:

• Withdrawals of property may be subject to sales taxes (e.g., GST/HST in Canada) if the property would be subject to such taxes if sold to a third party. The partnership must account for and remit any applicable sales taxes on the withdrawal.

Example of Sales Tax Calculation: If the fair value of the withdrawn property is $15,000 and the applicable sales tax rate is 5%, the partnership must account for $750 in sales taxes.

Journal Entry Example with Sales Tax:

Partner B, Drawings                $15,750

   Inventory                           $15,000

   GST/HST Payable                      $750

In this entry, the drawings account is debited for the total amount including the sales tax, the inventory account is credited for its fair value, and the GST/HST payable account is credited for the sales tax amount.

Conclusion

Accurate bookkeeping for specific transactions in partnerships, such as the contribution and withdrawal of property, is crucial for maintaining the integrity of the financial records and ensuring compliance with tax regulations. By recording contributions at fair market value and considering the tax implications and elections available, partnerships can effectively manage their financial and tax obligations. Similarly, accounting for withdrawals at fair value and addressing any applicable sales taxes ensures transparency and accuracy in the partnership’s financial reporting. These practices not only provide a clear financial picture but also help in building trust among partners and stakeholders.

 

Disposition of Partnership Interests

Selling Partnership Interests

When a partner decides to sell their interest in a partnership, it involves transferring their ownership stake to another party. This process must be carefully managed to ensure proper accounting and tax compliance.

Accounting for Transfer of Interests

Transfer Process:

• The sale of a partnership interest is a transaction between the selling partner and the buyer. The partnership itself does not directly record the transaction in its books. However, the partnership must update its records to reflect the new ownership structure.

Recording the Transfer:

• The selling partner’s capital account is transferred to the new partner (or the purchasing existing partner). The partnership must ensure that the buyer’s capital account reflects the purchase price paid for the partnership interest.

Example: Partner A sells their partnership interest to Partner C. Partner A’s capital account balance is $50,000, and Partner C pays $60,000 for the interest. The partnership must update its records to reflect this change.

Journal Entry Example:

No direct entry in the partnership’s books, but an update to the capital accounts:

Partner A, Capital                $50,000  (removed from books)

Partner C, Capital                $50,000  (added to books)

If Partner C is an existing partner, the transaction might be reflected as an increase in Partner C’s capital account:

 

Partner C, Capital (new contribution)  $60,000

Partner A, Capital                     $50,000  (removed from books)

Cash (or payable to Partner A)         $10,000  (difference paid to Partner A)

Tax Reporting Implications for Selling Partners

Capital Gains or Losses:

• The sale of a partnership interest typically results in a capital gain or loss for the selling partner. This gain or loss is calculated as the difference between the selling price (proceeds of disposition) and the adjusted cost base (ACB) of the partnership interest, plus any expenses incurred to sell the interest.

Calculating Capital Gain or Loss:

• Proceeds of Disposition: The amount received from the sale.
• Adjusted Cost Base (ACB): The original cost of the partnership interest, plus any subsequent contributions, minus any withdrawals or previous distributions of capital.
• Selling Expenses: Costs directly related to the sale of the partnership interest.

Example: If Partner A sells their partnership interest for $60,000, with an ACB of $40,000 and selling expenses of $2,000, the capital gain would be:

Capital Gain = Proceeds of Disposition – (ACB + Selling Expenses)

Capital Gain = $60,000 – ($40,000 + $2,000)

Capital Gain = $18,000

Reporting the Gain or Loss:

• The capital gain or loss must be reported on the selling partner’s personal tax return. In Canada, only 50% of the capital gain is taxable (inclusion rate), which means Partner A would include $9,000 ($18,000 x 50%) in their taxable income.

Tax Form:

• The selling partner will typically report the gain or loss on Schedule 3 of their T1 Income Tax and Benefit Return, detailing the disposition of their partnership interest.

Potential for Deferred Gains:

• In some cases, if certain conditions are met, the selling partner might be eligible to defer the capital gain. For example, if the sale is structured as a rollover under section 85 of the Income Tax Act (Canada), the gain can be deferred until the new owner disposes of the interest.

Example of Deferred Gain: Partner A rolls over their partnership interest to Partner C under section 85, agreeing to a transfer at ACB. The gain is deferred, and Partner A does not recognize a capital gain at the time of the transaction. Partner C’s ACB for the partnership interest is now $40,000 (Partner A’s ACB).

Conclusion

The disposition of partnership interests involves careful accounting and tax considerations. Properly recording the transfer of interests ensures that the partnership’s records accurately reflect the new ownership structure. Selling partners must be aware of the tax implications, including the calculation and reporting of capital gains or losses. By understanding and following these guidelines, partnerships can ensure a smooth transition of ownership and compliance with relevant tax regulations.

 

Tax Reporting for Partnerships

Income Tax

Partnerships themselves do not pay income tax. Instead, the income, deductions, and credits of the partnership flow through to the individual partners, who report these amounts on their personal or corporate tax returns.

Calculation and Allocation of Partnership Income

Calculation of Partnership Income:

• The partnership calculates its net income or loss as if it were a separate entity. This calculation includes all revenues, expenses, gains, and losses incurred by the partnership during the tax year.
• The resulting net income or loss is then allocated among the partners based on the terms of the partnership agreement. If there is no specific agreement, income is typically divided equally among the partners.

Example Calculation:

Total Revenue:                          $500,000

Total Expenses:                        ($300,000)

Net Income:                             $200,000

Allocation of Income:

• The partnership agreement specifies the profit-sharing ratios. For example, if Partner A and Partner B share profits equally, each partner would be allocated $100,000 of the net income.

Journal Entry for Allocation:

Income Summary                         $200,000

   Partner A, Capital                     $100,000

   Partner B, Capital                     $100,000

Partners’ Individual Tax Returns

Reporting Allocated Income:

• Each partner includes their share of the partnership’s net income on their personal or corporate tax return. In Canada, partners use the T5013 slip to report their share of the partnership’s income, deductions, and credits.

Example of Individual Tax Reporting: Partner A receives a T5013 slip showing $100,000 of partnership income. Partner A includes this amount on their personal tax return under “Other Income” or “Business Income,” depending on the nature of the partnership’s business.

Tax Forms:

• T5013 Slip: Issued to each partner detailing their share of the partnership’s income and other relevant tax information.
• T1 Income Tax and Benefit Return: Used by individual partners to report their income, including partnership income.
• T2 Corporation Income Tax Return: Used by corporate partners to report their share of the partnership’s income.

GST/HST and Provincial Sales Tax

Partnerships, like other businesses, must comply with the goods and services tax/harmonized sales tax (GST/HST) and provincial sales tax (PST) regulations.

Registration and Remittance at the Partnership Level

GST/HST Registration:

• Partnerships engaged in commercial activities with annual revenues exceeding the small supplier threshold ($30,000 in Canada) must register for GST/HST. Registration allows the partnership to charge GST/HST on taxable supplies and claim input tax credits (ITCs) for GST/HST paid on business expenses.

Charging and Remitting GST/HST:

• Registered partnerships must charge GST/HST on taxable supplies made to customers and remit the collected taxes to the Canada Revenue Agency (CRA).

Example of GST/HST Remittance:

Total Sales (including GST/HST):         $105,000

GST/HST Collected (5%):                   $5,000

Journal Entry for Remittance:

GST/HST Payable                          $5,000

   Cash                                      $5,000

Recovery of GST/HST on Partnership Expenditures

Input Tax Credits (ITCs):

• Partnerships can claim ITCs for the GST/HST paid on business-related purchases and expenses. ITCs reduce the net GST/HST payable to the CRA.

Example of ITC Calculation:

Total GST/HST Paid on Expenses:           $2,000

Net GST/HST Remittable:                   $5,000 (Collected) – $2,000 (ITCs) = $3,000

Journal Entry for ITCs:

GST/HST Recoverable                      $2,000

   Expenses                                 $2,000

Provincial Sales Tax (PST):

• PST applies to certain goods and services in provinces like British Columbia, Saskatchewan, Manitoba, and Quebec. Partnerships must register for, collect, and remit PST in these provinces according to local regulations.

Example of PST Remittance:

Total Sales (including PST):              $107,000

PST Collected (7%):                        $7,000

Journal Entry for PST:

PST Payable                              $7,000

   Cash                                      $7,000

Conclusion

Proper tax reporting for partnerships involves meticulous calculation and allocation of income, accurate reporting on individual partners’ tax returns, and compliance with GST/HST and provincial sales tax regulations. Partnerships must ensure they register for and remit the appropriate taxes while taking advantage of input tax credits to minimize their tax liabilities. By adhering to these guidelines, partnerships can maintain good standing with tax authorities and ensure transparent and accurate financial reporting.

 

Note Disclosures for Partnership Financial Statements

Key Components of Note Disclosures

Partnership Agreement Terms

Description:

• Disclosures should include key terms of the partnership agreement, such as profit-sharing ratios, management responsibilities, and procedures for admitting new partners or handling partner withdrawals.

Sample Note:

Note 1: Partnership Agreement Terms

The partnership agreement, dated January 1, 2024, outlines the following key terms:

– Profit-sharing ratios: Partner A and Partner B share profits and losses equally (50% each).

– Management responsibilities: Partner A is responsible for operations management, while Partner B oversees financial management.

– New partners: Admission of new partners requires unanimous consent from existing partners.

– Withdrawal of partners: A partner intending to withdraw must provide a 90-day written notice. The remaining partners have the option to purchase the withdrawing partner’s interest at fair market value.

Partner Contributions and Withdrawals

Description:

• Disclosures should detail the contributions made by partners during the period and any withdrawals or distributions.

Sample Note:

Note 2: Partner Contributions and Withdrawals

During the year ended December 31, 2024, the following contributions and withdrawals were made by partners:

 

Partner A:

– Contributions: $10,000 in cash and $5,000 in equipment.

– Withdrawals: $8,000 in cash.

 

Partner B:

– Contributions: $15,000 in cash.

– Withdrawals: $5,000 in cash.

 

These transactions have been recorded in the respective capital accounts of the partners.

Contingent Liabilities and Commitments

Description:

• Disclosures should include any contingent liabilities and commitments that may impact the partnership’s financial position.

Sample Note:

Note 3: Contingent Liabilities and Commitments

As of December 31, 2024, the partnership has the following contingent liabilities and commitments:

 

– Contingent liabilities: The partnership is a defendant in a lawsuit claiming damages of $50,000. Legal counsel has advised that the likelihood of an unfavorable outcome is possible but not probable.

– Commitments: The partnership has entered into a lease agreement for office space, commencing January 1, 2025, with annual lease payments of $20,000 for five years.

Related Party Transactions

Description:

• Disclosures should identify any transactions with related parties, including the nature of the relationship, transaction amounts, and terms.

Sample Note:

Note 4: Related Party Transactions

During the year ended December 31, 2024, the partnership engaged in the following related party transactions:

 

– Partner A provided consulting services to the partnership for $10,000, which were billed at market rates and on normal commercial terms.

– Partner B sold office equipment to the partnership for $5,000. The transaction was conducted at fair market value.

 

These transactions were conducted on terms equivalent to those prevailing in arm’s length transactions.

Importance of Transparency and Compliance

Ensuring Comprehensive and Clear Disclosures

Description:

• Comprehensive and clear disclosures provide stakeholders with a full understanding of the partnership’s financial position and operations. This transparency helps in building trust and ensuring that financial statements are informative and reliable.

Meeting Canadian GAAP Requirements

Description:

• Compliance with Canadian Generally Accepted Accounting Principles (GAAP) is essential for ensuring that financial statements are prepared consistently and meet the required accounting standards. This compliance enhances the credibility of the financial statements and ensures legal and regulatory adherence.

Sample Comprehensive Note:

Notes to the Financial Statements

 

Note 1: Partnership Agreement Terms

The partnership agreement, dated January 1, 2024, outlines the following key terms:

– Profit-sharing ratios: Partner A and Partner B share profits and losses equally (50% each).

– Management responsibilities: Partner A is responsible for operations management, while Partner B oversees financial management.

– New partners: Admission of new partners requires unanimous consent from existing partners.

– Withdrawal of partners: A partner intending to withdraw must provide a 90-day written notice. The remaining partners have the option to purchase the withdrawing partner’s interest at fair market value.

 

Note 2: Partner Contributions and Withdrawals

During the year ended December 31, 2024, the following contributions and withdrawals were made by partners:

 

Partner A:

– Contributions: $10,000 in cash and $5,000 in equipment.

– Withdrawals: $8,000 in cash.

 

Partner B:

– Contributions: $15,000 in cash.

– Withdrawals: $5,000 in cash.

 

These transactions have been recorded in the respective capital accounts of the partners.

 

Note 3: Contingent Liabilities and Commitments

As of December 31, 2024, the partnership has the following contingent liabilities and commitments:

– Contingent liabilities: The partnership is a defendant in a lawsuit claiming damages of $50,000. Legal counsel has advised that the likelihood of an unfavorable outcome is possible but not probable.

– Commitments: The partnership has entered into a lease agreement for office space, commencing January 1, 2025, with annual lease payments of $20,000 for five years.

 

Note 4: Related Party Transactions

During the year ended December 31, 2024, the partnership engaged in the following related party transactions:

– Partner A provided consulting services to the partnership for $10,000, which were billed at market rates and on normal commercial terms.

– Partner B sold office equipment to the partnership for $5,000. The transaction was conducted at fair market value.

 

These transactions were conducted on terms equivalent to those prevailing in arm’s length transactions.

 

Conclusion

Clear and comprehensive note disclosures are essential for providing stakeholders with a transparent view of the partnership’s financial health. By detailing key elements such as partnership agreement terms, partner contributions and withdrawals, contingent liabilities and commitments, and related party transactions, partnerships can ensure compliance with Canadian GAAP and foster trust among investors, creditors, and other stakeholders. These disclosures not only enhance the credibility of the financial statements but also ensure that the partnership’s financial practices align with legal and regulatory standards.

 

Common Challenges and Solutions in Partnership Accounting

Complex Transactions

Handling complex transactions in partnerships requires meticulous attention to detail and a robust understanding of accounting principles. These transactions can include various types of contributions and withdrawals, which can be challenging to manage.

Handling Complex Contributions and Withdrawals

Challenge:

• Contributions and withdrawals of property or other non-cash assets can be complex to record accurately. Determining the fair market value (FMV) of contributed assets, accounting for any related tax implications, and properly reflecting these transactions in the partnership’s books can be difficult.

Solution:

• Fair Market Value Assessments: Ensure that all non-cash contributions are assessed at their fair market value at the time of contribution. Engage professional appraisers if necessary to determine the accurate FMV of complex assets.
• Proper Documentation: Maintain comprehensive documentation of all contributions and withdrawals, including valuations, agreements, and supporting evidence. This documentation is crucial for both financial reporting and tax compliance.
• Consistent Policies: Establish clear policies for handling contributions and withdrawals. This includes setting guidelines for valuation methods, documentation requirements, and approval processes. Consistent application of these policies helps maintain accuracy and fairness.

Example:

Partner A contributes equipment valued at $25,000 to the partnership.

Journal Entry:

Equipment                         $25,000

   Partner A, Capital                  $25,000

Managing Disputes and Ensuring Compliance

Challenge:

• Disputes among partners regarding the valuation of contributions, allocation of profits and losses, or withdrawal amounts can arise, potentially disrupting business operations. Ensuring compliance with partnership agreements and relevant laws is also a complex task.

Solution:

• Clear Partnership Agreement: A detailed and well-drafted partnership agreement is essential. It should clearly outline the procedures for contributions, withdrawals, profit allocation, and dispute resolution mechanisms.
• Regular Reviews and Audits: Conduct regular reviews and audits of financial records to ensure compliance with the partnership agreement and relevant laws. Independent audits can help identify discrepancies and prevent disputes.
• Effective Communication: Foster open and effective communication among partners. Regular meetings to discuss financial matters and resolve any issues can help maintain harmony and transparency.

Example: A disagreement arises regarding the valuation of an asset contributed by Partner B. The partnership agreement specifies that an independent appraiser should be engaged to resolve such disputes.

Maintaining Accurate Records

Accurate record-keeping is fundamental to the financial health and success of a partnership. It ensures that all financial transactions are correctly recorded and reported.

Importance of Detailed and Accurate Bookkeeping

Challenge:

• Inaccurate or incomplete bookkeeping can lead to financial discrepancies, tax issues, and potential disputes among partners. It can also hinder the ability to make informed business decisions.

Solution:

• Comprehensive Bookkeeping Practices: Implement comprehensive bookkeeping practices that include detailed recording of all financial transactions, regular reconciliation of accounts, and proper classification of expenses and income.
• Regular Updates: Maintain up-to-date records by recording transactions as they occur. Avoid delays in entering data to prevent backlogs and potential errors.
• Periodic Reviews: Conduct periodic reviews of the financial records to ensure accuracy and completeness. This can involve cross-checking entries with supporting documents and correcting any discrepancies promptly.

Example: A monthly review process is established where financial records are checked against bank statements, invoices, and receipts to ensure accuracy.

Utilizing Accounting Software and Professional Advice

Challenge:

• Managing partnership accounts manually can be time-consuming and prone to errors. Lack of professional expertise can also lead to non-compliance with accounting standards and tax regulations.

Solution:

• Accounting Software: Utilize accounting software to streamline bookkeeping processes. Software solutions can automate many tasks, reduce errors, and provide real-time financial data. Features like invoicing, expense tracking, and financial reporting can significantly enhance accuracy and efficiency.
• Professional Advice: Engage professional accountants or bookkeepers who specialize in partnership accounting. Their expertise can help ensure compliance with accounting standards and tax laws, and provide valuable insights into financial management.
• Training and Development: Provide training for partners and staff on using accounting software and understanding basic accounting principles. This empowers them to maintain accurate records and make informed financial decisions.

Example: The partnership implements QuickBooks for managing its finances. A professional accountant is hired to oversee the setup and provide ongoing support.

Conclusion

Managing complex transactions and maintaining accurate records are common challenges in partnership accounting. By implementing robust policies, utilizing accounting software, and seeking professional advice, partnerships can overcome these challenges and ensure accurate financial reporting and compliance with relevant standards. Effective communication, regular reviews, and a detailed partnership agreement are also crucial for maintaining harmony and transparency among partners. Through these practices, partnerships can enhance their financial health and make informed business decisions.

 

Best Practices for Partnership Accounting

Effective partnership accounting is essential for ensuring the financial health and success of a business. Implementing best practices can help manage financial operations smoothly, foster trust among partners, and maintain compliance with legal and regulatory standards. Here are some key best practices for partnership accounting:

Choosing the right partners is crucial for the long-term success of the partnership. Partners should bring complementary skills and expertise to the business, ensuring a well-rounded management team. Each partner should contribute unique strengths that complement the others. For example, one partner might excel in financial management while another might be a marketing expert. This diversity in skills helps address various aspects of the business effectively. Trust is the foundation of any successful partnership. Partners should have a shared vision and mutual respect for each other. Open and honest communication fosters a positive working relationship and helps prevent misunderstandings and conflicts. A partnership between an experienced accountant and a skilled marketer can leverage the strengths of both individuals to manage finances effectively while also driving business growth through marketing initiatives.

Regular financial reviews are essential for monitoring the financial health of the partnership. These reviews help identify any discrepancies, assess performance, and make necessary adjustments to stay on track with financial goals. Regular reviews help in the early detection of financial irregularities, allowing for timely corrective actions. Reviewing financial statements periodically helps assess the partnership’s performance against its goals and benchmarks. Up-to-date financial information enables partners to make informed decisions about investments, expansions, and other strategic moves. Conducting quarterly financial reviews helps ensure that the partnership’s financial records are accurate and up-to-date. This practice also allows partners to adjust their strategies based on the latest financial data.

Seeking professional assistance from accountants and legal advisors is a best practice that can significantly enhance the partnership’s financial health. Professionals provide expert guidance on complex financial and legal matters, ensuring compliance and optimizing financial performance. Accountants help prepare accurate financial statements, ensuring compliance with accounting standards and regulations. Professional accountants assist with tax planning and compliance, helping the partnership minimize tax liabilities and avoid penalties. Accountants also provide valuable insights through financial analysis, helping partners make informed business decisions. Legal advisors help draft comprehensive partnership agreements that outline roles, responsibilities, profit-sharing ratios, and dispute resolution mechanisms. They ensure that the partnership complies with all relevant laws and regulations, reducing the risk of legal issues. In case of disputes, legal advisors provide guidance and representation to protect the partnership’s interests.

At Shajani CPA, we understand the unique challenges that partnerships face. Our team of experienced accountants and advisors is dedicated to helping partnerships thrive. We offer a range of services, including financial statement preparation, tax planning, and advisory services, tailored to meet the specific needs of your partnership. Let Shajani CPA be your trusted partner in achieving financial success. Tell us your ambitions, and we will guide you there. Partnering with Shajani CPA for your accounting needs ensures that your financial records are accurate, your tax liabilities are minimized, and your partnership complies with all relevant regulations. Our expert team is here to support your business growth and financial health.

Implementing best practices for partnership accounting is crucial for maintaining the financial health and success of the business. Choosing the right partners with complementary skills and trust, conducting regular financial reviews, and engaging professional assistance from accountants and legal advisors are essential steps. Shajani CPA offers the expertise and support needed to navigate these challenges effectively, helping your partnership achieve its financial goals. Contact Shajani CPA today and let us guide you to success.

 

Conclusion

Proper financial statement reporting for partnerships is vital for ensuring transparency, compliance, and informed decision-making. Effective partnership accounting practices, such as choosing the right partners with complementary skills and trust, conducting regular financial reviews, and engaging professional assistance, can significantly enhance the financial health and success of a partnership.

At Shajani CPA, we understand the unique challenges that partnerships face and are dedicated to helping partnerships thrive. Our team of experienced accountants and advisors specializes in financial statement preparation, tax planning, and advisory services tailored to meet the specific needs of your partnership. By partnering with Shajani CPA, you can ensure that your financial records are accurate, your tax liabilities are minimized, and your partnership complies with all relevant regulations.

We invite you to seek professional guidance from Shajani CPA for all your partnership accounting needs. Contact us today and let us help you achieve your financial goals. Tell us your ambitions, and we will guide you there.

 

This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. ©2024 Shajani CPA.

Shajani CPA is a CPA Calgary, Edmonton and Red Deer firm and provides Accountant, Bookkeeping, Tax Advice and Tax Planning service.

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