Partnerships

This Support note is suitable for:

• ABSS Accounting
• ABSS Premier

Introduction

The MYOB family data structure is not specifically designed for Partnerships. However, it is possible to modify the Accounts List and make the necessary adjustments at the end of the year so your financial reports reflect a true position of your partnership. This support note guides you through this process.

How do I modify the MYOB Accounts List to setup for partnerships?

When a data file is created it automatically creates two equity accounts:

• 3-8000 Retained Earnings (previous years profit retained)
• 3-9000 Current Year Earnings (current year Profit)

Profit made during the current financial year is posted to 3-9000. When you run "Start a New Financial Year" all undistributed values left in this account are automatically transferred to (3-8000 Retained Earnings).

For a partnership, create extra Equity accounts for the partner‘s appropriation, such as: .

• Beginning Balance
• Drawings
• Distribution, etc.

How is the profit distributed between partners?

Prior to running Start a New Year, you will need to make General Journal entries between the Retained Earnings account (3-8000) and the Partner Distribution Accounts. The amount in the journal entry will be the balance of the Current Year Earnings account if you are distributing 100% of

Example: At the end of the financial year your income is $10,000 and your expenses are $6,000.

Note that without distributing the profits, after running a Start of New Financial Year, the $4,000 is rolled into Retained Earnings for the New Year and the Current Year Earnings is reduced to zero.

To distribute the profits, record a General Journal dated prior to running a Start of New Financial Year as follows:

This will result in the Retained Earnings being temporarily reduced by $4000. This won‘t affect profit and loss reporting as the Profit and Loss report derives its information from the income and expense accounts.

When the Start a New Year function is run, all your comparative figures will be correct and the balance in Current Year's Earnings will be added into Retained Earnings, setting it back to what it should be.

Disclaimer: This information is of a generic nature. For specific advice regarding your particular circumstances please seek assistance from your Accountant or your IT Consultant as appropriate.