Title

Applying accounting principles to the dissolution of a law firm

Document Type

Article

Publication Date

2004

Abstract

This teaching case shows how a partnership used a consultant to help resolve certain accounting issues associated with its dissolution. Focusing on accounting theory, partnership accounting and contracts, this case can help develop critical thinking skills and can be used in several accounting courses (including advanced financial accounting and accounting theory) at both the graduate and upper division undergraduate levels. The case demonstrates that lawyers and others who form partnerships should develop well-crafted operating agreements that cover normal and unusual business transactions as well as the firm’s dissolution. Specifically, they should identify and assess all matters relevant to the dissolution process, including the compensation scheme and other contractual issues. The case emphasizes the importance of accurate and timely accounting information – both during a firm’s life and at its dissolution. The case requires students to balance GAAP and the fair/equitable treatment of the partners involved.

Publisher's Statement

© 2004 Elsevier Ltd. Publisher's version of record: http://dx.doi.org/10.1016/j.jaccedu.2004.07.002

Publication Title

Journal of Accounting Education