The presentation and disclosure guidance in this chapter applies to financial statements of limited liability companies (LLCs), general partnerships, limited partnerships (LPs), and other partnerships. The guidance also applies to LLCs that elect to be treated as partnerships for tax purposes unless otherwise indicated in this chapter. Master Limited Partnerships (MLPs) should apply the presentation and disclosure requirements of LPs unless otherwise indicated in this chapter. The guidance in this chapter does not apply to reporting entities that have investments in partnerships (see FSP 9 and FSP 18).

Many of the SEC’s presentation and disclosure requirements for partnerships also apply to LLCs. Due to the nature of a partnership (i.e., owned by partners as opposed to stockholders), there are incremental and different presentation and disclosure requirements versus those of a corporation. This chapter focuses on the incremental requirements in Regulation S-X for both LLCs and partnerships. The primary differences between the financial statements of these various legal entities are the presentation of owners’ equity and the reconciliation of US GAAP to other bases of accounting, as applicable. Depending on the legal structure of the entity, the term “owners’ equity” may be replaced, for example, by the term “members’ equity” for LLCs. We use the term “owner” and “member” interchangeably in this chapter unless specific requirements apply to one legal structure and not another, in which case we will explicitly indicate the appropriate terminology.

This chapter also addresses the calculation of earnings per unit (EPU) for master limited partnerships and the presentation and disclosure requirements of a newly-formed partnership.