Overview
When managing complex wealth structures, assets are often held within a partnership (such as an LP or LLC). For accurate reporting, it is essential to review the partnership entity to identify the underlying assets and correctly attribute the specific share of those assets to each partner’s capital account.
What is Partnership Accounting?
Partnership accounting allows you to reflect shared ownership of specific assets through a central vehicle. This is a common requirement for:
- Private Equity/Venture Capital: Managing LPs and their specific interests in portfolio companies.
- Family Investment Vehicles: Tracking how different family members or trusts hold interests in a shared pool of assets.
- Co-investment Shields: Showing how multiple entities participate in a single investment via a lead vehicle.
Before this functionality, ORCA primarily displayed direct ownership. Now, you can automate the "look-through" so that a partner’s balance sheet reflects their proportional share of the underlying partnership assets, rather than just a flat line-item for the partnership itself.
Guide
1. How to Activate Partnership Functionality
- Open "Account Administration"
- Navigate to "Account Settings"
- Click "Legal Functionalities"
- Enable "Ownership in Third Party" (the underlying engine that powers Partnership Accounting).
2. How to Create a Partnership Relationship
To show that a partner holds an interest in an asset via a partnership:
- Identify the Asset (e.g., Apple Stock).
- Identify the Partnership Entity (e.g., Investment LLC).
- Identify the Partner (e.g., Dan).
In this setup, when you apply the “Co-owners” filter in your Dynamic Structure Chart, ORCA will recognize that the Partner is the Indirect Owner of the asset via the Partnership. This ensures the partner's capital account reflects the value of the underlying holding.
3. How to Adjust Interest & Capital Shares
Click into the line between the Entity or Asset you want to adjust the details of. To update the percentage of the partnership held by a specific member:
- Navigate to your Structure Chart.
- Click into the connection line between the Partner and the Partnership Entity (or between the Partnership and the Asset).
- Adjust the Ownership % or Capital Contribution value.
- ORCA will automatically recalculate the indirect value flow for all connected parties.
Understanding Position and Value Display
Scenario: Multiple partners holding the same asset via a Partnership. If "New Gen Company" (valued at $10,000,000) is held by a Partnership Entity, and that partnership has two partners (Partner A and Partner B):
- Direct View: The Partnership owns 100% of New Gen Company.
- Partnership View: ORCA splits the $10,000,000 value across the partners’ capital accounts based on their respective % interest.
- If Partner A owns 40% of the partnership, ORCA will display an indirect holding of $4,000,000 for Partner A in the reporting dashboard.
