Partnership with real property contribution:

1. Notarized
2. Inventory of property must be identified and attached
3. Partnership registered to SEC
→ Otherwise, ​VOID ​(not absolute in cases of partnership by ​estoppel)

Capital contribution of at least 3,000 or more​ → contracts must also be notarized and registered
to SEC. Will not affect the liability to third persons otherwise, still VALID.

Limited Partnership → ​signed under oath of every partner and registered to SEC.
A LImited partner in the 3rd person’s perspective → he is a general partner

Contributions:
1. Cash - recorded at face value
2. Non-cash -1) agreed value 2) face value → SEC validates the valuation of a real
property contributed.
Agreed value first then face value

Sharing of profits and losses

1) Based on profit agreement
2) Capital contribution

● Satisfy first the share of industrial partner→ based on the share of capitalist partner with
the least contribution based on OLD law but it should stated in the problem)
● Profit agreement always prevails over other manners of sharing

● Losses are shared:

○ 1) loss agreement
○ 2) profit agreement
○ The remaining losses shall be divided based on the capital contribution

Industrial partners are exempted from sharing of losses (on any loss, not
just net loss)

● Salaries and interest ​are not expenses of the partnership. Only a scheme to distribute
profits.
● Interests → weighted average capital are based on actually used contribution in the
partnership; only the ​permanent drawing​s affect the computation of weighted average
of capital

Partnership Dissolution:
- Change in the relation among the partners within the partnership
- Not necessarily terminates the partnership immediately
 ● Admission of new partners
→ consider the capital contribution of the new partner
→ capital of the old partners
→ compare total contributed capital to total agreed capital
TAC> TCC = Goodwill (difference TAG and TCC)
TAC=TCC → no goodwill but there might a possibility of a bonus among
partners
When the assigned capital of a partner is different from his contributed
capital → there is a ​bonus ​among the partners.

● Retirement
→ compare TAC>TCC after the retirement and usually, goodwill is attributable to
the retiring partner
● Withdrawal of another partner
● Death/ Incapacity → could be physical or legal incapacity

Long-term Construction Contracts

- No enforceable rights on the contract → no revenue recognized

- 1) percentage of completion
2) cost recovery method → no longer preferred in PFRS 15