In practice, we often encounter the problem of consolidated statements of limited partnership funds. Whether GP is merged into GP as an executive partner or LP with the largest capital contribution is more a question of accounting treatment. But sometimes this issue will become a more important legal issue, and even affect the design of the entire transaction structure. This paper intends to make a brief analysis of the consolidated statements of limited partnership enterprises in combination with the provisions of relevant accounting standards and the characteristics of limited partnership enterprises.

I. Consolidated Statements and Control

According to the Accounting Standards for Enterprises No.33-Consolidated Financial Statements (hereinafter referred to as "Standards No.33") revised by the Ministry of Finance in February 14, the consolidation scope of consolidated financial statements should be determined on the basis of control.

Control means that investors have power over the investee, enjoy variable returns by participating in the related activities of the investee, and have the ability to use the power over the investee to influence the amount of returns.

Similar to the organizational form of a company, the consolidated statements of a limited partnership are also based on control. Therefore, the consolidated statement of limited partnership funds is essentially a question of judgment and ownership of control rights. No matter the general partner or the limited partner, whoever has the control right of the limited partnership fund will consolidate the partnership.

Second, the characteristics of limited partnership funds

Compared with general companies, limited partnerships usually have the following characteristics:

1. contribution: the limited partnership fund consists of general partners and limited partners. Limited partners are generally responsible for investing most of the capital, and their capital contribution will account for 80%~99% of the total capital contribution. The general partner only contributes symbolically;

2. Management: For limited partnership funds, the general partner is usually fully responsible for the management of the fund and bears unlimited joint and several liabilities; Limited partners do not participate in the operation and management of the fund, and only bear limited liability to the extent of capital contribution;

3. Income distribution: As limited partners generally do not participate in fund management, general partners and limited partners do not share profits strictly according to their respective investment proportions, but will consider the operation and management of the partnership enterprise and the unlimited joint and several liabilities assumed by the general partners, so that the profits they share are higher than their investment proportions. The main income sources of general partners are management fees and performance sharing, which is also in line with the principle of matching risks and benefits;

4. Organizational structure: Compared with companies, the organizational structure of limited partnership private equity funds is more humane, flexible and convenient, and can be set according to the needs of partners. Generally, an "investment decision-making committee" and other institutions will be set up to take charge of investment management and other business decision-making matters. As investment is the core business activity of limited partnership funds, the "Investment Decision Committee" which has the final decision-making power on investment is the most important business decision-making body of enterprises.

5. Constraints on general partners: From the perspective of the replacement mechanism of general partners, it is often agreed that limited partners can unilaterally decide the replacement of general partners (decided by all or most of them).