Admission by the Purchase of an Interest
Accounting glossary · Understand, connect, apply
Admission by purchase of an interest occurs when a new partner buys an ownership interest directly from an existing partner rather than contributing the purchase price to the partnership.
Example
A buyer pays an existing partner personally; the partnership records an agreed transfer between capital accounts without receiving the purchase cash.
Remember the difference
The personal purchase price need not equal the transferred book capital. Do not record cash the partnership did not receive.
Updated 3 November 2026. Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
← Return to the accounting glossary