Each partner's initial non-cash investment in the partnership should be recorded at the
A) fair value of the assets at the date of their transfer into the business.
B) fair value of the assets at the date the partnership begins operations.
C) original cost of the assets at the time they were purchased by the contributing partner.
D) carrying amount of the assets at the date of their transfer into the partnership.

Question

Quizplus · Accepted Answer

The correct approach for recording a partner's initial non-cash investment in a partnership is at the fair value of the assets at the date of their transfer into the business. This method ensures that the partnership's financial statements accurately reflect the current value of the assets contributed.

Each Partner's Initial Non-Cash Investment in the Partnership Should Be