ASC 272 LIMITED LIABILITY ENTITIES

Accounting Standards Codification (ASC) 272, Limited Liability Entities, contains one subtopic: ASC 272-10, Overall, that contains guidance for limited liability entities organized in the United States that prepare financial statements under U.S. GAAP. ASC 272 does define a limited liability company as having the following characteristics: it is an unincorporated association of two or more persons, its members have limited personal liability for the obligations or debts of the entity, and it is classified as a partnership for federal income tax purposes. ASC 272 addresses certain issues pertaining to accounting and reporting by limited liability entities: either a limited liability company or a limited liability partnership. This topic establishes that, when an entity restructures itself as a limited liability entity, the basis of all assets and liabilities from its predecessor entity are carried forward.