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6 May, 2015 - 17:10

Partners can be admitted into a partnership by either 1) purchasing an interest of the firm from a current partner, or 2) contributing assets to the business. When a partner purchases an interest in a business, only the capital accounts change. When a new partner contributes assets to a business, both assets and owners' equity increase. When a new partner contributes assets, current partners should assign a fair market value to the asset. In the event an asset is improperly valued, and is reevaluated at a later date, the partners divide an increase or a decrease among themselves.