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Consolidated Audits: The Benefits and Challenges

Consolidated Audits: The Benefits and Challenges. October 6, 2009 Supportive Housing Network of New York. Why. EITF 04-05 Determining When a General Partner, or General Partners as a Group, Controls a Limited Partnership or Similar Entity when the Limited Partners have Certain Rights.

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Consolidated Audits: The Benefits and Challenges

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  1. Consolidated Audits: The Benefits and Challenges October 6, 2009 Supportive Housing Network of New York

  2. Why • EITF 04-05 Determining When a General Partner, or General Partners as a Group, Controls a Limited Partnership or Similar Entity when the Limited Partners have Certain Rights

  3. When Implementation Date • - June 29, 2005 for new LP’s and existing partnership for which the partnership agreements are modified. • - No later than the beginning of the first reporting period of the fiscal year beginning after December 15, 2005 for all other LP’s

  4. The Test Presumption of Control – any one of the following: • Kick out rights Ability to be removed without cause • Participating rights Effectively participate in significant decisions that would be expected to be made in the ordinary course of the limited partnership’s business • Protective rights Limited partner’s ability to block certain action of the limited partnership (amendments, dissolution, acquisition and dispositions etc.)

  5. Benefits • Ability to tell story at enterprise level • Comprehensive picture by business lines • Demonstrates organization’s strength

  6. Issues and Challenges • Cost • Resource limitations • Fiscal vs. Calendar year ends • Consistency • 18 month or 6 month audit • Clarity or confusion • Trending issues

  7. Mechanics • Supplemental consolidating schedules • Reporting by business lines • Eliminating entries • Non controlling (minority) interest • Revenue recognition • Disclosures

  8. Multiple General Partners • Who has control • May result in no consolidation

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