Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | |
Document and Entity Information: | |||
Entity Registrant Name | COMMONWEALTH INCOME & GROWTH FUND VI | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Entity Central Index Key | 1351901 | ||
Current Fiscal Year End Date | -19 | ||
Entity Common Stock, Shares Outstanding | 1,795,592 | ||
Entity Public Float | $0 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | No | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, State Country Name | Commonwealth of Pennsylvania | ||
Entity Incorporation, Date of Incorporation | 6-Jan-06 |
Balance_Sheets
Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
ASSETS | ||||
Cash and cash equivalents | $148,748 | $29,493 | ||
Lease income receivable, net of reserve | 145,093 | [1] | 302,375 | [2] |
Accounts receivable - Affiliates | 324,754 | 428,786 | ||
Other receivables | 3,494 | 2,775 | ||
Prepaid expenses | 2,543 | 1,000 | ||
Current Assets | 624,632 | 764,429 | ||
Net Investment in Finance Leases | 141,327 | 98,098 | ||
Equipment, at cost | 12,514,225 | 15,890,079 | ||
Accumulated depreciation | -9,853,504 | -11,559,623 | ||
Technology equipment, net | 2,660,721 | 4,330,456 | ||
Equipment acquisition costs and deferred expenses | 72,708 | [3] | 115,385 | [4] |
Total Assets | 3,499,388 | 5,308,368 | ||
LIABILITIES | ||||
Accounts payable | 125,731 | 97,794 | ||
Accounts Payable - Affiliate | 347,209 | 65,555 | ||
Other accrued expenses | 216,014 | 517,521 | ||
Unearned lease income | 89,464 | 103,075 | ||
Notes payable | 690,550 | 173,876 | ||
Total Liabilities | 1,468,968 | 957,821 | ||
PARTNERS' CAPITAL | ||||
General Partner | 1,000 | 1,000 | ||
Limited Partners | 2,029,420 | 4,349,547 | ||
Total Partners' Capital | 2,030,420 | 4,350,547 | ||
Total Liabilities and Partners' Capital | $3,499,388 | $5,308,368 | ||
[1] | Net of reserve of approximately $37,000. | |||
[2] | Net of reserve of approximately $42,000. | |||
[3] | Net of accumulated amortization of approximately $125,000. | |||
[4] | Net of accumulated amortization of approximately $186,000. |
Balance_Sheets_Parenthetical
Balance Sheets - Parenthetical (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Balance Sheets | ||
Lease income receivable, reserve | $37,000 | $42,000 |
Land, Buildings, Equipment and Leasehold Improvements, accumulated depreciation and amortization | $125,000 | $186,000 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue | ||
Lease | $3,087,970 | $4,013,350 |
Interest and other | 38,132 | 23,862 |
Gain on sale of investment in finance leases | 728 | |
Gain (loss) on sale of equipment | 85,100 | -17,749 |
Total revenue | 3,211,202 | 4,037,940 |
Expenses | ||
Operating, excluding legal, depreciation | 739,841 | 854,204 |
SEC restitution settlement, General Partner | -40,269 | |
Equipment management fee, General Partner | 155,210 | 205,706 |
Interest | 21,195 | 9,691 |
Depreciation | 2,244,578 | 3,469,640 |
Amortization of equipment acquisition costs and deferred expenses | 82,599 | 133,396 |
Loss on sale of equipment | 17,749 | |
Total expenses | 3,243,423 | 4,650,117 |
Other income (loss) | ||
Gain from insurance recovery | 100,652 | |
Total other income (loss) | 100,652 | |
Net Income (Loss) | 68,431 | -612,177 |
Net Income (Loss) allocated to Limited Partners | $44,580 | ($648,099) |
Net Income (Loss) per equivalent Limited Partnership unit | $0.02 | ($0.36) |
Weighted average number of equivalent limited partnership units outstanding during the period | 1,795,773 | 1,796,874 |
Statements_of_Partners_Capital
Statements of Partners' Capital (USD $) | General Partners | Limited Partners | Total |
Partners' Capital at Dec. 31, 2012 | $1,000 | $8,593,645 | $8,594,645 |
Partners' Capital Account, Units at Dec. 31, 2012 | 50 | 1,800,881 | |
Partners' Capital Account, Redemptions | -39,762 | -39,762 | |
Partners' Capital Account, Units, Redeemed | -4,774 | 4,774 | |
Net (Loss) Income | 35,922 | -648,099 | -612,177 |
Distributions to Partners | -35,922 | -3,556,237 | -3,592,159 |
Partners' Capital at Dec. 31, 2013 | 1,000 | 4,349,547 | 4,350,547 |
Partners' Capital Account, Units at Dec. 31, 2013 | 50 | 1,796,107 | |
Partners' Capital Account, Redemptions | -3,411 | -3,411 | |
Partners' Capital Account, Units, Redeemed | -565 | 565 | |
Net (Loss) Income | 23,851 | 44,580 | 68,431 |
Distributions to Partners | -23,851 | -2,361,296 | -2,385,147 |
Partners' Capital at Dec. 31, 2014 | $1,000 | $2,029,420 | $2,030,420 |
Partners' Capital Account, Units at Dec. 31, 2014 | 50 | 1,795,542 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | |||
Net cash provided by operating activities | ||||
Net loss | $68,431 | ($612,177) | ||
Adjustments to reconcile net loss to net cash provided by operating activities | ||||
Depreciation and amortization | 2,327,177 | 3,603,036 | ||
Gain on the sale of investment in finance leases | -728 | |||
Gain on sale of equipment | -85,100 | 17,749 | ||
Other noncash activities | ||||
Lease revenue net of interest expense, on notes payable, realized as a result of direct payment of principal to bank by lessee | -365,498 | -185,150 | ||
Amortization of initial direct costs | 2,399 | 428 | ||
Earned interest on finance leases | -10,262 | -3,167 | ||
Lease income receivable | 157,282 | 236,147 | ||
Accounts receivable, Commonwealth Capital Corp., net | 104,032 | 413,607 | ||
Other receivables | -719 | 3,920 | ||
Prepaid expenses | -1,543 | -488 | ||
Accounts payable | 27,937 | -29,470 | ||
Accounts payable, Other Affiliates, net | 281,654 | [1] | -151,242 | [1] |
Other accrued expenses | -103,084 | -30,027 | ||
Unearned lease income | -13,611 | -170,225 | ||
Net cash provided by operating activities | 2,389,095 | 3,092,213 | ||
Net cash used in investing activities | ||||
Capital expenditures | -302,887 | -560,971 | ||
Purchase of finance leases | -73,033 | -99,192 | ||
Payments received from finance leases | 40,588 | 6,420 | ||
Equipment acquisition fees paid to General Partner | -34,021 | -48,606 | ||
Net proceeds from the sale of finance leases | 56,443 | |||
Net proceeds from the sale of equipment | 287,768 | 354,776 | ||
Net cash (used in) investing activities | -81,585 | -291,130 | ||
Net cash used in financing activities | ||||
Redemptions | -3,411 | -39,762 | ||
Distributions to partners | -2,176,022 | -3,592,159 | ||
Debt placement fees paid to General Partner | -8,822 | -651 | ||
Net cash (used in) financing activities | -2,188,255 | -3,632,572 | ||
Net (decrease) in cash and cash equivalents | 119,255 | -831,489 | ||
Cash and cash equivalents beginning of period | 29,493 | 860,982 | ||
Cash and cash equivalents end of period | $148,748 | $29,493 | ||
[1] | Payable to CIGF, Inc. |
Business
Business | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Business | Business |
Commonwealth Income & Growth Fund VI (the “Partnership”) is a limited partnership organized in the Commonwealth of Pennsylvania on January 6, 2006. The Partnership offered for sale up to 2,500,000 units of limited partnership interest at the purchase price of $20 per unit (the “offering”). The Partnership reached the minimum amount in escrow and commenced operations on May 10, 2007. The offering terminated on March 6, 2009 with 1,810,311 units sold for a total of approximately $36,000,000 in limited partner contributions. | |
During the years ended December 31, 2014 and 2013, limited partners redeemed 565 and 4,774 units of partnership interest for a total redemption price of approximately $3,000 and $40,000 in accordance with the terms of the Partnership’s Limited Partnership Agreement (the “Agreement”) respectively. | |
The Partnership uses the proceeds of the offering to acquire, own and lease various types of computer information technology equipment and other similar capital equipment, which is leased primarily to U.S. corporations and institutions. Commonwealth Capital Corp. (“CCC”), on behalf of the Partnership and other affiliated partnerships, acquires computer equipment subject to associated debt obligations and lease agreements and allocates a participation in the cost, debt and lease revenue to the various partnerships based on certain risk factors. | |
The Partnership’s investment objective is to acquire primarily high technology equipment. Information technology has developed rapidly in recent years and is expected to continue to do so. Technological advances have permitted reductions in the cost of information technology processing capacity, speed, and utility. In the future, the rate and nature of equipment development may cause equipment to become obsolete more rapidly. The Partnership also acquires high technology medical, telecommunications and inventory management equipment. The Partnership’s General Partner will seek to maintain an appropriate balance and diversity in the types of equipment acquired. The market for high technology medical equipment is growing each year. Generally, this type of equipment will have a longer useful life than other types of technology equipment. This allows for increased re-marketability, if it is returned before its economic or announcement cycle is depleted. | |
The Partnership’s General Partner is Commonwealth Income & Growth Fund, Inc. (the “General Partner”), a Pennsylvania corporation which is an indirect wholly-owned subsidiary of CCC. CCC is a member of the Investment Program Association (IPA), REISA, Financial Planning Association (FPA), and the Equipment Leasing and Finance Association (ELFA). Approximately ten years after the commencement of operations, the Partnership intends to sell or otherwise dispose of all of its equipment, make final distributions to partners, and to dissolve. Unless sooner terminated or extended pursuant to the terms of the Agreement, the Partnership will continue until December 31, 2018. | |
Allocations of income and distributions of cash are based on the Agreement. The various allocations under the Agreement prevent any limited partner’s capital account from being reduced below zero and ensure the capital accounts reflect the anticipated sharing ratios of cash distributions, as defined in the Agreement. During years ended December 31, 2014 and 2013, cash distributions to limited partners were made at a rate of approximately 7% and 10%, respectively, of their original contributed capital. Distributions during the years ended December 31, 2014 and 2013 were made to limited partners in the amount of approximately $1.31 and $1.98, respectively, per unit based on each investor’s number of limited partnership units outstanding during the year. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Notes | |||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies | ||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Such estimates relate primarily to the determination of residual values at the end of the lease term, the expected future cash flows and fair value used for impairment analysis purposes and determination of the allowance for doubtful accounts. | |||||||||||||||||
Disclosure of Fair Value | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
The Partnership applies the provisions included in the Fair Value Measurements and Disclosures Topic to all financial and non-financial assets and liabilities. This Topic emphasizes that fair value is a market-based measurement, not an entity-specific measurement. It clarifies that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The Topic requires the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize use of unobservable inputs. These inputs are prioritized as follows: | |||||||||||||||||
Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. | |||||||||||||||||
Level 3: Unobservable inputs for which there is little or no market data and which require internal development of assumptions about how market participants price the asset or liability. | |||||||||||||||||
There were no assets or liabilities measured at fair value on a recurring basis at December 31, 2014 and 2013. Fair Value Measurements on a nonrecurring basis as of December 31, 2014 and 2013 are as follows: | |||||||||||||||||
Fair Value as of | Fair Value Measurements | ||||||||||||||||
31-Dec-14 | Using Fair Value Hierarchy | ||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets | |||||||||||||||||
Equipment | $ | 75,000 | $ | — | $ | 75,000 | $ | — | |||||||||
Fair Value as of | Fair Value Measurements | ||||||||||||||||
31-Dec-13 | Using Fair Value Hierarchy | ||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets | |||||||||||||||||
Equipment | $ | 68,000 | $ | — | $ | 68,000 | $ | — | |||||||||
Equipment is measured at fair value on a non-recurring basis in conjunction with the Partnership's impairment analysis. An impairment charge of approximately $41,000 and $48,000 was recorded for equipment written down to fair value in 2014 and 2013, respectively, as a component of depreciation expense in the accompanying statements of operations. The fair value of equipment was calculated using a market approach for 2014 and 2013. The market approach utilized third party appraisals or comparable sales of similar assets which are inputs classified as level 2 within the fair value hierarchy. | |||||||||||||||||
Fair Value disclosures of financial instruments | |||||||||||||||||
Estimated fair value was determined by management using available market information and appropriate valuation methodologies. However, judgment was necessary to interpret market data and develop estimated fair value. Cash, receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of December 31, 2014 and 2013 due to the immediate or short-term nature of these financial instruments. | |||||||||||||||||
The Partnership’s long-term debt consists of notes payable, which are secured by specific equipment and are nonrecourse liabilities of the Partnership. The estimated fair value of this debt at December 31, 2014 and 2013 approximates the carrying value of these instruments, due to the interest rates on this debt approximating current market values. The Partnership classifies the fair value of its notes payable within Level 2 of the valuation hierarchy based on the observable inputs used to estimate fair value. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
For the year ended December 31, 2014, the Partnership’s lease portfolio consisted of operating leases and finance leases. For operating leases, lease revenue is recognized on a straight-line basis in accordance with the terms of the lease agreement. | |||||||||||||||||
Finance lease interest income is recorded over the term of the lease using the effective interest method. For finance leases, we record, at lease inception, unearned finance lease income which is calculated as follows: total lease payments, plus any residual value and initial direct costs, less the cost of the leased equipment. | |||||||||||||||||
Upon the end of the lease term, if the lessee has not met the return conditions as set out in the lease, the Partnership is entitled in certain cases to additional compensation from the lessee. The Partnership’s accounting policy for recording such payments is to treat them as revenue. | |||||||||||||||||
Gains or losses from sales of leased and off-lease equipment are recorded on a net basis in the Partnership’s Statement of Operations. Gains from the termination of leases are recognized when the lease is modified and terminated concurrently. Gains from lease termination included in lease revenue for the year ended December 31, 2014 was approximately $185,000. For the year ended December 31, 2013, the Partnership did not recognize any gain from the termination of leases. | |||||||||||||||||
Our leases do not contain any step-rent provisions or escalation clauses nor are lease revenues adjusted based on any index. | |||||||||||||||||
Other Assets | |||||||||||||||||
Equipment acquisition costs and deferred expenses are amortized on a straight-line basis over two-to-four year lives based on the original term of the lease and loan, respectively. Unamortized acquisition costs and deferred expenses are charged to amortization expense when the associated leased equipment is sold. | |||||||||||||||||
Long-Lived Assets | |||||||||||||||||
Depreciation on technology and inventory management equipment for financial statement purposes is based on the straight-line method estimated generally over useful lives of two to four years. Once an asset comes off lease or is released, the Partnership reassesses the useful life of an asset. | |||||||||||||||||
The Partnership evaluates its long-lived assets when events or circumstances indicate that the value of the asset may not be recoverable. The Partnership determines whether impairment exists by estimating the undiscounted cash flows to be generated by each asset. If the estimated undiscounted cash flows are less than the carrying value of the asset then impairment exists. The amount of the impairment is determined based on the difference between the carrying value and the fair value. Fair value is determined based on estimated discounted cash flows to be generated by the asset, third party appraisals or comparable sales of similar assets, as applicable, based on asset type. An impairment charge of approximately $41,000 and $48,000 was recorded for equipment written down to fair value in 2014 and 2013, respectively, as a component of depreciation expense in the accompanying statements of operations. | |||||||||||||||||
Residual values are determined by management and are calculated using information from both internal and external sources, as well as other economic indicators. | |||||||||||||||||
Reimbursable Expenses | |||||||||||||||||
Reimbursable expenses are comprised of both ongoing operational expenses and fees associated with the allocation of salaries and benefits, referred to as other LP expenses. Reimbursable expenses, which are charged to the Partnership by CCC in connection with the administration and operation of the Partnership, are allocated to the Partnership based upon several factors including, but not limited to, the number of investors, compliance issues, and the number of existing leases. For example, if a partnership has more investors than another program sponsored by CCC, then higher amounts of expenses related to investor services, including mailing and printing costs will be allocated to that partnership. Also, while a partnership is in its offering stage, higher compliance costs are allocated to it than to a program not in its offering stage, as compliance resources are utilized to review incoming investor suitability and proper documentation. Finally, lease related expenses, such as due diligence, correspondence, collection efforts and analysis and staff costs, increase as programs purchase more leases, and decrease as leases terminate and equipment is sold. All of these factors contribute to CCC’s determination as to the amount of expenses to allocate to the Partnership or to other sponsored programs. CCC is not reimbursed for salary and benefit costs of control persons. For the Partnership, all reimbursable items are expensed as they are incurred. | |||||||||||||||||
Lease Income Receivable | |||||||||||||||||
Lease income receivable includes current lease income receivable net of allowances for uncollectible amounts, if any. The Partnership monitors lease income receivable to ensure timely and accurate payment by lessees. The Partnership’s Lease Relations department is responsible for monitoring lease income receivable and, as necessary, resolving outstanding invoices. | |||||||||||||||||
The Partnership reviews a customer’s credit history before extending credit. When the analysis indicates that the probability of full collection is unlikely, the Partnership may establish an allowance for uncollectible lease income receivable based upon the credit risk of specific customers, historical trends and other information. The Partnership writes off its lease income receivable when it determines that it is uncollectible and all economically sensible means of recovery have been exhausted. | |||||||||||||||||
Cash and cash equivalents | |||||||||||||||||
We consider cash and cash equivalents to be cash on hand and highly liquid investments with an original maturity of 90 days or less. | |||||||||||||||||
At December 31, 2014, cash was held in a total of two accounts maintained at one financial institution with an aggregate balance of approximately $151,000. Bank accounts are federally insured up to $250,000 by the FDIC. At December 31, 2014 and 2013, the aggregate cash balances were as follows: | |||||||||||||||||
Balance at December 31, | 2014 | 2013 | |||||||||||||||
Total bank balance | $ | 151,000 | $ | 31,000 | |||||||||||||
FDIC insured | $ | (151,000 | ) | $ | (31,000 | ) | |||||||||||
Uninsured amount | $ | 0 | $ | 0 | |||||||||||||
The Partnership's deposits are fully insured by the FDIC. The Partnership has not experienced any losses in our accounts, and believes it is not exposed to any significant credit risk. The amounts in such accounts will fluctuate throughout 2015 due to many factors, including cash receipts, interest rates and distributions to limited partners. | |||||||||||||||||
Income Taxes | |||||||||||||||||
Pursuant to the provisions of Section 701 of the Internal Revenue Code, the Partnership is not subject to federal income taxes. All income and losses of the Partnership are the liability of the individual partners and are allocated to the partners for inclusion in their individual tax returns. The Partnership does not have any entity-level uncertain tax positions. In addition, the Partnership believes its tax status as a pass-through entity would be sustained under U.S. Federal, state or local tax examination. The Partnership files U.S. federal and various state income tax returns and is generally subject to examination by federal, state and local income tax authorities for three years from the filing of a tax return. | |||||||||||||||||
Taxable income differs from financial statement net income as a result of reporting certain income and expense items for tax purposes in periods other than those used for financial statement purposes, principally relating to depreciation, amortization, and lease revenue. | |||||||||||||||||
Net Income (Loss) Per Equivalent Limited Partnership Unit | |||||||||||||||||
The net income (loss) per equivalent limited partnership unit is computed based upon net income (loss) allocated to the limited partners and the weighted average number of equivalent units outstanding during the period. | |||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, requires management to determine whether substantial doubt exists regarding the entity’s going concern presumption. If substantial doubt exists but is not alleviated by management’s plans, the footnotes must specifically state that “there is substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued.” In addition, if substantial doubt exists, regardless of whether such doubt was alleviated, entities must disclose (a) principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans, if any); (b) management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations; and (c) management’s plans that are intended to mitigate the conditions or events that raise substantial doubt, or that did alleviate substantial doubt, about the entity’s ability to continue as a going concern. If substantial doubt has not been alleviated, these disclosures should become more extensive in subsequent reporting periods as additional information becomes available. In the period that substantial doubt no longer exists (before or after considering management’s plans), management should disclose how the principal conditions and events that originally gave rise to substantial doubt have been resolved. The ASU applies prospectively to all entities for annual periods ending after December 15, 2016, and to annual and interim periods thereafter. Early adoption is permitted. The Partnership is currently evaluating the effect that this ASU will have on its financial statements. | |||||||||||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Partnership is currently evaluating the effect that this ASU will have on its financial statements. | |||||||||||||||||
In April 2014, the FASB issued ASU No. 2014-08 (“ASU Updated 2014-08”), Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU provides guidance on the change in criteria established to enhance the presentation of reporting discontinued operations. The guidance is effective for annual financial statements beginning on or after December 15, 2014 that report discontinued operations or disposals of components of an entity. The Partnership is currently evaluating the effect that this ASU will have on its financial statements. | |||||||||||||||||
In March 2014, the FASB issued ASU No. 2014-06 (“ASU Updated 2014-06”), Technical Corrections and Improvements Related to Glossary Terms. This ASU provides updates to the FASB Accounting Standards Codification established in September 2009 as the source of authoritative U.S. GAAP recognized by the FASB. The update is effectively immediately upon issuance. The Partnership adopted this ASU during the first quarter of 2014 and there was no material impact on its financial statements. |
Capital_Equipment
Capital Equipment | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Notes | |||||
Capital Equipment | Information Technology, Medical Technology, Telecommunications Technology, Inventory Management and Other Business-Essential Capital Equipment (“Equipment”) | ||||
The Partnership is the lessor of equipment under leases with periods generally ranging from 12 to 48 months. In general, associated costs such as repairs and maintenance, insurance and property taxes are paid by the lessee. | |||||
The Partnership recorded an impairment charge of approximately $41,000 and $48,000 at December 31, 2014 and 2013, respectively, as impairment indicators were noted, and is included in depreciation expense in the accompanying financial statements. | |||||
In December 2014, a significant lessee, ALSC, breached its Master Lease Agreement ("MLA") scheduled to terminate in January 2016 and defaulted on its lease payments for equipment shared by the Partnership and other affiliated Funds. On December 4, 2014, ALSC filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. On April 2, 2015, CCC, on behalf of the Funds, entered into a settlement agreement with the parent company of ALSC for $3,500,000. The Partnership's share of this settlement is approximately $84,000 of which $68,000 will be recorded as a gain on termination of leases in 2015. In addition, the Bankruptcy Court ordered the release of all equipment leased to ALSC under the MLA to the Partnerships. In January 2015, CCC, on behalf of the Funds, entered into a Purchase Agreement ("Purchase Agreement") for the sale of the equipment to Medshare Technologies for approximately $3,400,000. The Partnership's share of the sales proceeds is approximately $75,000. | |||||
Remarketing fees will be paid to the leasing companies from which the Partnership purchases leases. These are fees that are earned by the leasing companies when the initial terms of the lease have been met. The General Partner believes that this strategy adds value since it entices the leasing company to remain actively involved with the lessees and encourages potential extensions, remarketing or sale of equipment. This strategy is designed to minimize any conflicts the leasing company may have with a new lessee and may assist in maximizing overall portfolio performance. The remarketing fee is tied into lease performance thresholds and is a factor in the negotiation of the fee. Remarketing fees incurred in connection with lease extensions are accounted for as operating costs. Remarketing fees incurred in connection with the sale of equipment are included in the gain or loss calculations. For the years ended December 31, 2014 and 2013, approximately $32,000 of remarketing fees were incurred, respectively. For the year ended December 31, 2013, approximately $61,000 of remarketing fees were paid with cash or netted against receivables due from such parties. For the year ended December 31, 2014, no remarketing fees were paid. | |||||
CCC, on behalf of the Partnership and on behalf of other affiliated partnerships, acquires equipment subject to associated debt obligations and lease agreements and allocates a participation in the cost, debt and lease revenue to the various partnerships based on certain risk factors. | |||||
The Partnership’s share of the cost of the equipment in which it participates with other partnerships at December 31, 2014 was approximately $6,006,000 and is included in the Partnership’s equipment on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at December 31, 2014 was approximately $13,135,000. The Partnership’s share of the outstanding debt associated with this equipment at December 31, 2014 was approximately $471,000 and is included in the Partnership’s notes payable on its balance sheet. The total outstanding debt related to the equipment shared by the Partnership at December 31, 2014 was approximately $1,443,000. | |||||
The Partnership’s share of the cost of the equipment in which it participates with other partnerships at December 31, 2013 was approximately $6,066,000 and is included in the Partnership’s equipment on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at December 31, 2013 was approximately $13,646,000. The Partnership’s share of the outstanding debt associated with this equipment at December 31, 2013 was approximately $174,000 and is included in the Partnership’s notes payable on its balance sheet. The total outstanding debt related to the equipment shared by the Partnership at December 31, 2013 was approximately $455,000. | |||||
As the Partnership and the other programs managed by the General Partner increase their overall portfolio size, opportunities for shared participation are expected to continue. Sharing in the acquisition of a lease portfolio gives the Partnership an opportunity to acquire additional assets and revenue streams, while allowing the Partnership to remain diversified and reducing its overall risk with respect to one portfolio. Thus, total shared equipment and related debt should continue throughout 2015 as the Partnership continues to acquire equipment for its portfolio. | |||||
The following is a schedule of future minimum rentals on non-cancelable operating leases at December 31, 2014: | |||||
Year Ending December 31, | Amount | ||||
2015 | $ | 1,451,000 | |||
2016 | 493,000 | ||||
2017 | 85,000 | ||||
$ | 2,029,000 | ||||
Finance_Leases
Finance Leases | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes | |||||||||
Finance Leases | Finance Leases | ||||||||
The following lists the components of the net investment in direct financing leases at December 31: | |||||||||
2014 | 2013 | ||||||||
Total minimum lease payments to be received | $ | 135,000 | $ | 98,000 | |||||
Initial direct costs | 4,000 | 4,000 | |||||||
Allowance for bad debt | 0 | 0 | |||||||
Estimated residual value of leased equipment (unguaranteed) | 19,000 | 11,000 | |||||||
Less: unearned income | -17,000 | -15,000 | |||||||
Net investment in direct finance leases | $ | 141,000 | $ | 98,000 |
Significant_Customers
Significant Customers | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Notes | |||||
Significant Customers | Significant Customers | ||||
Lessees equal to or exceeding 10% of lease revenue for the year ended December 31: | |||||
2014 | 2013 | ||||
Cummins, Inc. | 22% | 16% | |||
Aetna Life Insurance | 17% | 14% | |||
Cargill, Inc. | 12% | 12% | |||
Alliant Techsystems | 11% | - | |||
Lessees equal to or exceeding 10% of net lease income receivable at December 31: | |||||
2014 | 2013 | ||||
Aerojet General Corporation | - | 47% | |||
Motorola, Inc. | 27% | 10% | |||
Cargill, Inc. | 26% | - | |||
Alliant Techsystems | 11% | 17% |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Notes | ||||||||||
Related Party Transactions | Related Party Transactions | |||||||||
Receivables/Payables | ||||||||||
As of December 31, 2014 the Partnership’s related party receivables and payables are short term, unsecured, and non-interest bearing. | ||||||||||
ENTITY RECEIVING | TYPE OF COMPENSATION | AMOUNT | AMOUNT | |||||||
COMPENSATION | INCURRED | INCURRED | ||||||||
DURING 2014 | DURING 2013 | |||||||||
OPERATIONAL AND SALE OR LIQUIDATION STAGES | ||||||||||
The General Partner | Equipment Acquisition Fee. The General Partner earned an equipment acquisition fee of 4% of the purchase price of each item of equipment purchased as compensation for the negotiation of the acquisition of the equipment and lease thereof or sale under a conditional sales contract. For the year ended December 31, 2014, equipment acquisition fees earned for operating and finance leases was approximately $31,000 and $3,000, respectively. | $ | 34,000 | $ | 49,000 | |||||
The General Partner and its Affiliates | Reimbursable Expenses. The General Partner and its affiliates are entitled to reimbursement by the Partnership for the cost of goods, supplies or services obtained and used by the general partner in connection with the administration and operation of the partnership from third parties unaffiliated with the General Partner. The amounts set forth on this table do not include expenses incurred in the offering of units. For the years ended December 31, 2014 and 2013, the Partnership was charged approximately $305,000 and $427,000 in other LP expense, respectively. | $ | 628,000 | $ | 805,000 | |||||
The General Partner | Debt Placement Fee. As compensation for arranging term debt to finance the acquisition of equipment to the Partnership, a fee equal to one percent of such indebtedness; provided, however, that such fee shall be reduced to the extent the Partnership incurs such fees to third parties unaffiliated with the General Partner or the lender, with respect to such indebtedness. No such fee will be paid with respect to borrowings from the general partner or its affiliates. | $ | 9,000 | $ | 1,000 | |||||
The General Partner | Equipment Management Fee. A monthly fee equal to the lesser of (a) the fees which would be charged by an independent third party in the same geographic market for similar services and similar equipment or (b) the sum of (i) two percent of the gross lease revenues attributable to equipment subject to full payout net leases which contain net lease provisions and (ii) five percent of the gross lease revenues attributable to equipment subject to operating leases and (iii) two percent of the gross lease revenues attributable to equipment subject to finance leases. | $ | 155,000 | $ | 206,000 | |||||
The General Partner | Equipment Liquidation Fee. With respect to each item of equipment sold by the general partner, a fee equal to the lesser of (i) 50% of the competitive equipment sale commission or (ii) three percent of the sales price for such equipment. The payment of this fee is subordinated to the receipt by the Limited Partners of (i) a return of their capital contributions and 10% annum cumulative return, compounded daily, on adjusted capital contributions and (ii) the net disposition proceeds from such sale in accordance with the Partnership Agreement. Such fee is reduced to the extent any liquidation or resale fees are paid to unaffiliated parties. During the years ended December 31, 2014 and 2013, the General Partner earned but waived approximately $0 and $2,000 of equipment liquidation fees, respectively. | $ | 9,000 | $ | 9,000 | |||||
The General Partner | Partnership Interest and Distribution. The General Partner has a present and continuing one percent interest of $1,000 in the Partnership’s item of income, gain, loss, deduction, credit, and tax preference. In addition, the General Partner receives one percent of Cash Available for Distribution until the Limited Partners have received distributions of Cash Available for Distribution equal to their Capital Contributions plus the 10% Cumulative Return and thereafter, the General Partner will receive 10% of Cash Available for Distribution. | $ | 24,000 | $ | 36,000 |
Notes_Payable
Notes Payable | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes | |||||||||
Notes Payable | Notes Payable | ||||||||
Notes payable consisted approximately of the following: | |||||||||
December 31, | 2014 | 2013 | |||||||
Installment note payable to bank: interest rate of 5.25%, due in monthly installments of $7,441, including interest with final payment in July 2014 | $ | 0 | $ | 52,000 | |||||
Installment note payable to bank; interest rate of 4.23%, due in quarterly installments of $10,311 including interest with final payment in September 2015 | 30,000 | 69,000 | |||||||
Installment note payable to bank; interest rate of 4.23%, due in quarterly installments of $5,665, including interest, with final payment in June 2016 | 33,000 | 53,000 | |||||||
Installment note payable to bank; interest rate of 4.85%, due in quarterly installments of $35,894, including interest, with final payment in August 2016 | 240,000 | 0 | |||||||
Installment note payable to bank; interest rate of 4.23%, due in quarterly installments of $6,288, including interest, with final payment in December 2016 | 48,000 | 0 | |||||||
Installment note payable to bank; interest rate of 1.60%, due in monthly installments of $2,775, including interest, with final payment in March 2017 | 74,000 | 0 | |||||||
Installment note payable to bank; interest rate of 1.60%, due in monthly installments of $5,138, including interest, with final payment in April 2017 | 141,000 | 0 | |||||||
Installment note payable to bank; interest rate of 4.85%, due in quarterly installments of $7,699, including interest, with final payment in July 2017 | 87,000 | 0 | |||||||
Installment note payable to bank; interest rate of 4.23%, due in quarterly installments of $420, including interest, with final payment in August 2017 | 5,000 | 0 | |||||||
Installment note payable to bank; interest rate of 4.88%, due in monthly installments of $1,058, including interest, with final payment in October 2017 | 33,000 | 0 | |||||||
$ | 691,000 | $ | 174,000 | ||||||
The notes are secured by specific equipment with a carrying value of approximately $831,000 and are nonrecourse liabilities of the Partnership. As such, the notes do not contain any financial debt covenants with which we must comply on either an annual or quarterly basis. Aggregate payments of notes payable for each of the periods subsequent to December 31, 2014 are as follows: | |||||||||
Year Ending December 31, | Amount | ||||||||
2015 | $ | 351,000 | |||||||
2016 | 277,000 | ||||||||
2017 | 63,000 | ||||||||
$ | 691,000 |
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Notes | |||||||||||
Supplemental Cash Flow Information | Supplemental Cash Flow Information | ||||||||||
Other noncash activities included in the determination of net loss are as follows: | |||||||||||
No interest or principal on notes payable was paid by the Partnership because direct payment was made by lessee to the bank in lieu of collection of lease income and payment of interest and principal by the Partnership. | |||||||||||
Noncash investing and financing activities include the following: | |||||||||||
Year ended December 31, | 2014 | 2013 | |||||||||
Debt assumed in connection with purchase of equipment | $ | 475,000 | $ | 65,000 | |||||||
Debt assumed and satisfaction of accrued expenses in 2014 in connection with acquisition of equipment in 2013 | $ | 408,000 | $ | - | |||||||
Accrued expenses incurred in connection with the purchase of technology equipment | $ | - | $ | 498,000 | |||||||
Accrual for distribution to partners paid in January 2015 | $ | 209,000 | $ | - | |||||||
During the years ended December 31, 2014 and 2013, the Partnership wrote-off fully amortized acquisition and finance fees of approximately $144,000 and $307,000, respectively. | |||||||||||
During the years ended December 31, 2014 and 2013, the Partnership wrote-off fully reserved lease income receivable of approximately $5,000 and $408,000, respectively. | |||||||||||
During the years ended December 31, 2014 and 2013, the Partnership wrote-off fully depreciated assets of approximately $403,000 and $2,122,000, respectively. | |||||||||||
For the years ended December 31, 2014 and 2013, the Partnership recorded impairment charges of approximately $41,000 and $48,000, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Notes | |
Commitments and Contingencies | Commitments and Contingencies |
Allied Health Care Services | |
As previously disclosed in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2013, management wrote off the fully reserved accounts receivable and fully impaired assets related to the lease to Allied Health Care Services, Inc. (“Allied”), due to the bankruptcy of Allied and the criminal conviction of its founder for fraud. There have been no material changes in the status of Allied’s bankruptcy or in the likelihood of recovering available assets since the date of the Partnership’s annual report. The deadline for the bankruptcy trustee to pursue adversary claims against certain creditors has expired, including extensions. The bankruptcy trustee cannot seek to claim the Partnership's payments received from Allied, therefore the Partnership has no exposure to such potential claims. Commonwealth continues to pursue all of our rights against both Allied and Mr. Schwartz to recover any available assets to the greatest extent possible. | |
SEC Settlement | |
In August 2012, the staff of the U.S. Securities and Exchange Commission raised a question with Commonwealth Capital Corp. (“Commonwealth”), the sponsor of our funds, regarding the interpretation and application of the term “control person.” The term affected the scope of the reimbursement to Commonwealth of certain expenses incurred for the funds. The staff was concerned that some investors may not have understood the meaning and methodology used by the funds. Commonwealth worked with the staff to assure that our disclosure was clarified. Commonwealth Income and Growth Fund, Inc., the General Partner of the funds, entered into a settlement with the SEC in September 2013 of approximately $200,000 that is being allocated to several of the Funds. The Partnership’s portion of the settlement is approximately $40,000, which was recorded as a reduction in expenses in the condensed statement of operations during the year ended December 31, 2013 in accordance with the accounting guidance in FASB ASC 605-50. As of September 30, 2014, the receivable was completely satisfied. On October 17, 2014, Commonwealth Capital Corp. received a letter from the Miami Regional Office of the SEC confirming that Commonwealth Income & Growth Fund, Inc. and Kimberly Springsteen-Abbott had satisfied in full the monetary provisions of the Settlement Order entered on September 27, 2013. | |
FINRA Review | |
On May 3, 2013, the FINRA Department of Enforcement filed a complaint naming Commonwealth Capital Securities Corp. ("CCSC") and the owner of the firm, Kimberly Springsteen-Abbott, as respondents; however on October 22, 2013, FINRA filed an amended complaint that dropped the allegations against CCSC and reduced the scope of the allegations against Ms. Springsteen-Abbott. The sole remaining charge was that Ms. Springsteen-Abbott had approved the misallocation of some expenses to certain Funds. Management believes that the expenses at issue include amounts that were proper and that were properly allocated to Funds, and also identified a smaller number of expenses that had been allocated in error, but were adjusted and repaid to the affected Funds when they were identified in 2012. During the period in question, Commonwealth Capital Corp. and Ms. Springsteen-Abbott provided important financial support to the Funds, voluntarily absorbed expenses and voluntarily waived fees in amounts aggregating in excess of any questioned allocations. That Panel ruled on March 30, 2015, that Ms. Springsteen-Abbott should be barred from the securities industry because the Panel concluded that she allegedly misallocated $208,000 of expenses involving certain Funds over the course of three years. Ms. Springsteen-Abbott intends to vigorously challenge the Panel's decision on appeal. Decisions issued by FINRA's Office of Hearing Officers may be appealed to FINRA's National Adjudicatory Council (NAC) pursuant to FINRA Rule 931. Under NASD Rule 1015, an applicant may file a written request for review of the membership decision with the NAC within 25 days after service of the decision. While a panel decision is on appeal, the sanction is not enforced against the individual. No adjustments were made to the 2014 financial statements with respect to the Fund's share of the allegedly misallocated expenses, pending the appeal. Management believes that resolution of the charge will not result in any material adverse financial impact on the Funds, but no assurance can be provided until the FINRA matter is resolved. For the year ended December 31, 2014, the Partnership recorded a gain of approximately $101,000 for an insurance recovery under the Partnership's Officers' and Directors' insurance policy related to legal fees incurred in connection with the FINRA matter. |
Reconciliation_of_Amounts_Repo
Reconciliation of Amounts Reported For Financial Reporting Purposes To Amounts On The Federal Partnership Return (unaudited) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes | |||||||||
Reconciliation of Amounts Reported For Financial Reporting Purposes To Amounts On The Federal Partnership Return (unaudited) | Reconciliation of Amounts Reported for Financial Reporting Purposes to Amounts on the Federal Partnership Return (Unaudited) | ||||||||
The tax bases of the Partnership’s net assets and liabilities vary from the amounts presented in these financial statements at December 31, 2014 and 2013 as follows: | |||||||||
2014 | 2013 | ||||||||
Financial statement basis of net assets | $ | 2,030,420 | $ | 4,350,547 | |||||
Tax basis of net assets (unaudited) | -189,440 | 1,207,529 | |||||||
Difference (unaudited) | $ | 2,219,860 | $ | 3,143,018 | |||||
The primary differences between the tax bases of net assets and the amounts recorded in the financial statements are the result of differences in accounting for impairment losses, syndication costs and differences between the depreciation methods used in the financial statements and the Partnership’s tax returns (unaudited). | |||||||||
Years ended December 31, | 2014 | 2013 | |||||||
Net income (loss) for financial reporting purposes to taxable loss | $ | 68,431 | $ | -612,177 | |||||
Adjustments (unaudited) | |||||||||
Gain (loss) on sale of equipment | 177,058 | -15,110 | |||||||
Depreciation | 727,801 | 1,377,838 | |||||||
Amortization | 64,078 | 112,664 | |||||||
Unearned lease income | -24,159 | -149,232 | |||||||
Penalties | 185 | 951 | |||||||
Bad debts | -4,435 | -407,895 | |||||||
Other | -17,320 | 14,421 | |||||||
Taxable income (loss) on the Federal Partnership return (unaudited) | $ | 991,639 | $ | 321,460 | |||||
The “Adjustments – Other” includes financial statement adjustments that will be reflected on the tax return in the subsequent year. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies: Use of Estimates (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Use of Estimates | Use of Estimates |
The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Such estimates relate primarily to the determination of residual values at the end of the lease term, the expected future cash flows and fair value used for impairment analysis purposes and determination of the allowance for doubtful accounts. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies: Disclosure of Fair Value of Financial Instruments (Policies) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Policies | |||||||||||||||||
Disclosure of Fair Value of Financial Instruments | Disclosure of Fair Value | ||||||||||||||||
Fair Value Measurements | |||||||||||||||||
The Partnership applies the provisions included in the Fair Value Measurements and Disclosures Topic to all financial and non-financial assets and liabilities. This Topic emphasizes that fair value is a market-based measurement, not an entity-specific measurement. It clarifies that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The Topic requires the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize use of unobservable inputs. These inputs are prioritized as follows: | |||||||||||||||||
Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. | |||||||||||||||||
Level 3: Unobservable inputs for which there is little or no market data and which require internal development of assumptions about how market participants price the asset or liability. | |||||||||||||||||
There were no assets or liabilities measured at fair value on a recurring basis at December 31, 2014 and 2013. Fair Value Measurements on a nonrecurring basis as of December 31, 2014 and 2013 are as follows: | |||||||||||||||||
Fair Value as of | Fair Value Measurements | ||||||||||||||||
31-Dec-14 | Using Fair Value Hierarchy | ||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets | |||||||||||||||||
Equipment | $ | 75,000 | $ | — | $ | 75,000 | $ | — | |||||||||
Fair Value as of | Fair Value Measurements | ||||||||||||||||
31-Dec-13 | Using Fair Value Hierarchy | ||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets | |||||||||||||||||
Equipment | $ | 68,000 | $ | — | $ | 68,000 | $ | — | |||||||||
Equipment is measured at fair value on a non-recurring basis in conjunction with the Partnership's impairment analysis. An impairment charge of approximately $41,000 and $48,000 was recorded for equipment written down to fair value in 2014 and 2013, respectively, as a component of depreciation expense in the accompanying statements of operations. The fair value of equipment was calculated using a market approach for 2014 and 2013. The market approach utilized third party appraisals or comparable sales of similar assets which are inputs classified as level 2 within the fair value hierarchy. | |||||||||||||||||
Fair Value disclosures of financial instruments | |||||||||||||||||
Estimated fair value was determined by management using available market information and appropriate valuation methodologies. However, judgment was necessary to interpret market data and develop estimated fair value. Cash, receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of December 31, 2014 and 2013 due to the immediate or short-term nature of these financial instruments. | |||||||||||||||||
The Partnership’s long-term debt consists of notes payable, which are secured by specific equipment and are nonrecourse liabilities of the Partnership. The estimated fair value of this debt at December 31, 2014 and 2013 approximates the carrying value of these instruments, due to the interest rates on this debt approximating current market values. The Partnership classifies the fair value of its notes payable within Level 2 of the valuation hierarchy based on the observable inputs used to estimate fair value. |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies: Revenue Recognition (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Revenue Recognition | Revenue Recognition |
For the year ended December 31, 2014, the Partnership’s lease portfolio consisted of operating leases and finance leases. For operating leases, lease revenue is recognized on a straight-line basis in accordance with the terms of the lease agreement. | |
Finance lease interest income is recorded over the term of the lease using the effective interest method. For finance leases, we record, at lease inception, unearned finance lease income which is calculated as follows: total lease payments, plus any residual value and initial direct costs, less the cost of the leased equipment. | |
Upon the end of the lease term, if the lessee has not met the return conditions as set out in the lease, the Partnership is entitled in certain cases to additional compensation from the lessee. The Partnership’s accounting policy for recording such payments is to treat them as revenue. | |
Gains or losses from sales of leased and off-lease equipment are recorded on a net basis in the Partnership’s Statement of Operations. Gains from the termination of leases are recognized when the lease is modified and terminated concurrently. Gains from lease termination included in lease revenue for the year ended December 31, 2014 was approximately $185,000. For the year ended December 31, 2013, the Partnership did not recognize any gain from the termination of leases. | |
Our leases do not contain any step-rent provisions or escalation clauses nor are lease revenues adjusted based on any index. |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies: Other Assets (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Other Assets | Other Assets |
Equipment acquisition costs and deferred expenses are amortized on a straight-line basis over two-to-four year lives based on the original term of the lease and loan, respectively. Unamortized acquisition costs and deferred expenses are charged to amortization expense when the associated leased equipment is sold. |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies: Long-lived Assets (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Long-lived Assets | Long-Lived Assets |
Depreciation on technology and inventory management equipment for financial statement purposes is based on the straight-line method estimated generally over useful lives of two to four years. Once an asset comes off lease or is released, the Partnership reassesses the useful life of an asset. | |
The Partnership evaluates its long-lived assets when events or circumstances indicate that the value of the asset may not be recoverable. The Partnership determines whether impairment exists by estimating the undiscounted cash flows to be generated by each asset. If the estimated undiscounted cash flows are less than the carrying value of the asset then impairment exists. The amount of the impairment is determined based on the difference between the carrying value and the fair value. Fair value is determined based on estimated discounted cash flows to be generated by the asset, third party appraisals or comparable sales of similar assets, as applicable, based on asset type. An impairment charge of approximately $41,000 and $48,000 was recorded for equipment written down to fair value in 2014 and 2013, respectively, as a component of depreciation expense in the accompanying statements of operations. | |
Residual values are determined by management and are calculated using information from both internal and external sources, as well as other economic indicators. |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies: Reimbursable Expenses (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Reimbursable Expenses | Reimbursable Expenses |
Reimbursable expenses are comprised of both ongoing operational expenses and fees associated with the allocation of salaries and benefits, referred to as other LP expenses. Reimbursable expenses, which are charged to the Partnership by CCC in connection with the administration and operation of the Partnership, are allocated to the Partnership based upon several factors including, but not limited to, the number of investors, compliance issues, and the number of existing leases. For example, if a partnership has more investors than another program sponsored by CCC, then higher amounts of expenses related to investor services, including mailing and printing costs will be allocated to that partnership. Also, while a partnership is in its offering stage, higher compliance costs are allocated to it than to a program not in its offering stage, as compliance resources are utilized to review incoming investor suitability and proper documentation. Finally, lease related expenses, such as due diligence, correspondence, collection efforts and analysis and staff costs, increase as programs purchase more leases, and decrease as leases terminate and equipment is sold. All of these factors contribute to CCC’s determination as to the amount of expenses to allocate to the Partnership or to other sponsored programs. CCC is not reimbursed for salary and benefit costs of control persons. For the Partnership, all reimbursable items are expensed as they are incurred. |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies: Lease Income Receivable (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Lease Income Receivable | Lease Income Receivable |
Lease income receivable includes current lease income receivable net of allowances for uncollectible amounts, if any. The Partnership monitors lease income receivable to ensure timely and accurate payment by lessees. The Partnership’s Lease Relations department is responsible for monitoring lease income receivable and, as necessary, resolving outstanding invoices. | |
The Partnership reviews a customer’s credit history before extending credit. When the analysis indicates that the probability of full collection is unlikely, the Partnership may establish an allowance for uncollectible lease income receivable based upon the credit risk of specific customers, historical trends and other information. The Partnership writes off its lease income receivable when it determines that it is uncollectible and all economically sensible means of recovery have been exhausted. |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Policies | |||||||||
Cash and Cash Equivalents | Cash and cash equivalents | ||||||||
We consider cash and cash equivalents to be cash on hand and highly liquid investments with an original maturity of 90 days or less. | |||||||||
At December 31, 2014, cash was held in a total of two accounts maintained at one financial institution with an aggregate balance of approximately $151,000. Bank accounts are federally insured up to $250,000 by the FDIC. At December 31, 2014 and 2013, the aggregate cash balances were as follows: | |||||||||
Balance at December 31, | 2014 | 2013 | |||||||
Total bank balance | $ | 151,000 | $ | 31,000 | |||||
FDIC insured | $ | (151,000 | ) | $ | (31,000 | ) | |||
Uninsured amount | $ | 0 | $ | 0 | |||||
The Partnership's deposits are fully insured by the FDIC. The Partnership has not experienced any losses in our accounts, and believes it is not exposed to any significant credit risk. The amounts in such accounts will fluctuate throughout 2015 due to many factors, including cash receipts, interest rates and distributions to limited partners. |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies: Income Taxes (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Income Taxes | Income Taxes |
Pursuant to the provisions of Section 701 of the Internal Revenue Code, the Partnership is not subject to federal income taxes. All income and losses of the Partnership are the liability of the individual partners and are allocated to the partners for inclusion in their individual tax returns. The Partnership does not have any entity-level uncertain tax positions. In addition, the Partnership believes its tax status as a pass-through entity would be sustained under U.S. Federal, state or local tax examination. The Partnership files U.S. federal and various state income tax returns and is generally subject to examination by federal, state and local income tax authorities for three years from the filing of a tax return. | |
Taxable income differs from financial statement net income as a result of reporting certain income and expense items for tax purposes in periods other than those used for financial statement purposes, principally relating to depreciation, amortization, and lease revenue. |
Recovered_Sheet1
Summary of Significant Accounting Policies: Net Loss Per Equivalent Limited Partnership Unit (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Net Loss Per Equivalent Limited Partnership Unit | Net Income (Loss) Per Equivalent Limited Partnership Unit |
The net income (loss) per equivalent limited partnership unit is computed based upon net income (loss) allocated to the limited partners and the weighted average number of equivalent units outstanding during the period. |
Recovered_Sheet2
Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, requires management to determine whether substantial doubt exists regarding the entity’s going concern presumption. If substantial doubt exists but is not alleviated by management’s plans, the footnotes must specifically state that “there is substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued.” In addition, if substantial doubt exists, regardless of whether such doubt was alleviated, entities must disclose (a) principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans, if any); (b) management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations; and (c) management’s plans that are intended to mitigate the conditions or events that raise substantial doubt, or that did alleviate substantial doubt, about the entity’s ability to continue as a going concern. If substantial doubt has not been alleviated, these disclosures should become more extensive in subsequent reporting periods as additional information becomes available. In the period that substantial doubt no longer exists (before or after considering management’s plans), management should disclose how the principal conditions and events that originally gave rise to substantial doubt have been resolved. The ASU applies prospectively to all entities for annual periods ending after December 15, 2016, and to annual and interim periods thereafter. Early adoption is permitted. The Partnership is currently evaluating the effect that this ASU will have on its financial statements. | |
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Partnership is currently evaluating the effect that this ASU will have on its financial statements. | |
In April 2014, the FASB issued ASU No. 2014-08 (“ASU Updated 2014-08”), Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU provides guidance on the change in criteria established to enhance the presentation of reporting discontinued operations. The guidance is effective for annual financial statements beginning on or after December 15, 2014 that report discontinued operations or disposals of components of an entity. The Partnership is currently evaluating the effect that this ASU will have on its financial statements. | |
In March 2014, the FASB issued ASU No. 2014-06 (“ASU Updated 2014-06”), Technical Corrections and Improvements Related to Glossary Terms. This ASU provides updates to the FASB Accounting Standards Codification established in September 2009 as the source of authoritative U.S. GAAP recognized by the FASB. The update is effectively immediately upon issuance. The Partnership adopted this ASU during the first quarter of 2014 and there was no material impact on its financial statements. |
Recovered_Sheet3
Summary of Significant Accounting Policies: Disclosure of Fair Value of Financial Instruments: Fair Value Measurements, Recurring and Nonrecurring (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Tables/Schedules | |||||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring | There were no assets or liabilities measured at fair value on a recurring basis at December 31, 2014 and 2013. Fair Value Measurements on a nonrecurring basis as of December 31, 2014 and 2013 are as follows: | ||||||||||||||||
Fair Value as of | Fair Value Measurements | ||||||||||||||||
31-Dec-14 | Using Fair Value Hierarchy | ||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets | |||||||||||||||||
Equipment | $ | 75,000 | $ | — | $ | 75,000 | $ | — | |||||||||
Fair Value as of | Fair Value Measurements | ||||||||||||||||
31-Dec-13 | Using Fair Value Hierarchy | ||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets | |||||||||||||||||
Equipment | $ | 68,000 | $ | — | $ | 68,000 | $ | — | |||||||||
Recovered_Sheet4
Summary of Significant Accounting Policies: Cash and Cash Equivalents: Schedule of Cash and Cash Equivalents (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Tables/Schedules | |||||||||
Schedule of Cash and Cash Equivalents | |||||||||
Balance at December 31, | 2014 | 2013 | |||||||
Total bank balance | $ | 151,000 | $ | 31,000 | |||||
FDIC insured | $ | (151,000 | ) | $ | (31,000 | ) | |||
Uninsured amount | $ | 0 | $ | 0 |
Capital_Equipment_Schedule_of_
Capital Equipment: Schedule of future minimum rentals on non-cancelable leases (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Tables/Schedules | |||||
Schedule of future minimum rentals on non-cancelable leases | |||||
Year Ending December 31, | Amount | ||||
2015 | $ | 1,451,000 | |||
2016 | 493,000 | ||||
2017 | 85,000 | ||||
$ | 2,029,000 |
Finance_Leases_Schedule_of_net
Finance Leases: Schedule of net investment in direct financing leases (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Tables/Schedules | |||||||||
Schedule of net investment in direct financing leases | |||||||||
2014 | 2013 | ||||||||
Total minimum lease payments to be received | $ | 135,000 | $ | 98,000 | |||||
Initial direct costs | 4,000 | 4,000 | |||||||
Allowance for bad debt | 0 | 0 | |||||||
Estimated residual value of leased equipment (unguaranteed) | 19,000 | 11,000 | |||||||
Less: unearned income | -17,000 | -15,000 | |||||||
Net investment in direct finance leases | $ | 141,000 | $ | 98,000 |
Schedule_of_Finance_Lease_Risk
Schedule of Finance Lease Risk Level (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Tables/Schedules | |||||
Schedule of Finance Lease Risk Level | |||||
Risk Level | Percent of Customers | ||||
Low | - | % | |||
Moderate-Low | - | % | |||
Moderate | 100 | % | |||
Moderate-High | - | % | |||
High | - | % | |||
Net finance lease receivable | 100 | % |
Schedule_of_future_minimum_ren
Schedule of future minimum rentals on non-cancellable finance leases (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Tables/Schedules | |||||
Schedule of future minimum rentals on non-cancellable finance leases | |||||
Amount | |||||
Year ended December 31, 2015 | $ | 46,000 | |||
Year ended December 31, 2016 | 45,000 | ||||
Year ended December 31, 2017 | 39,000 | ||||
Year ended December 31, 2018 | 5,000 | ||||
$ | 135,000 |
Significant_Customers_Schedule
Significant Customers: Schedule of Lessees equal to or exceeding 10% of lease revenue (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Tables/Schedules | |||||
Schedule of Lessees equal to or exceeding 10% of lease revenue | |||||
2014 | 2013 | ||||
Cummins, Inc. | 22% | 16% | |||
Aetna Life Insurance | 17% | 14% | |||
Cargill, Inc. | 12% | 12% | |||
Alliant Techsystems | 11% | - |
Significant_Customers_Schedule1
Significant Customers: Schedule of Lessees equal to or exceeding 10% of lease income receivable (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Tables/Schedules | |||||
Schedule of Lessees equal to or exceeding 10% of lease income receivable | |||||
2014 | 2013 | ||||
Aerojet General Corporation | - | 47% | |||
Motorola, Inc. | 27% | 10% | |||
Cargill, Inc. | 26% | - | |||
Alliant Techsystems | 11% | 17% |
Related_Party_Transactions_Sch
Related Party Transactions: Schedule of Related Party Transactions (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Tables/Schedules | ||||||||||
Schedule of Related Party Transactions | ||||||||||
ENTITY RECEIVING | TYPE OF COMPENSATION | AMOUNT | AMOUNT | |||||||
COMPENSATION | INCURRED | INCURRED | ||||||||
DURING 2014 | DURING 2013 | |||||||||
OPERATIONAL AND SALE OR LIQUIDATION STAGES | ||||||||||
The General Partner | Equipment Acquisition Fee. The General Partner earned an equipment acquisition fee of 4% of the purchase price of each item of equipment purchased as compensation for the negotiation of the acquisition of the equipment and lease thereof or sale under a conditional sales contract. For the year ended December 31, 2014, equipment acquisition fees earned for operating and finance leases was approximately $31,000 and $3,000, respectively. | $ | 34,000 | $ | 49,000 | |||||
The General Partner and its Affiliates | Reimbursable Expenses. The General Partner and its affiliates are entitled to reimbursement by the Partnership for the cost of goods, supplies or services obtained and used by the general partner in connection with the administration and operation of the partnership from third parties unaffiliated with the General Partner. The amounts set forth on this table do not include expenses incurred in the offering of units. For the years ended December 31, 2014 and 2013, the Partnership was charged approximately $305,000 and $427,000 in other LP expense, respectively. | $ | 628,000 | $ | 805,000 | |||||
The General Partner | Debt Placement Fee. As compensation for arranging term debt to finance the acquisition of equipment to the Partnership, a fee equal to one percent of such indebtedness; provided, however, that such fee shall be reduced to the extent the Partnership incurs such fees to third parties unaffiliated with the General Partner or the lender, with respect to such indebtedness. No such fee will be paid with respect to borrowings from the general partner or its affiliates. | $ | 9,000 | $ | 1,000 | |||||
The General Partner | Equipment Management Fee. A monthly fee equal to the lesser of (a) the fees which would be charged by an independent third party in the same geographic market for similar services and similar equipment or (b) the sum of (i) two percent of the gross lease revenues attributable to equipment subject to full payout net leases which contain net lease provisions and (ii) five percent of the gross lease revenues attributable to equipment subject to operating leases and (iii) two percent of the gross lease revenues attributable to equipment subject to finance leases. | $ | 155,000 | $ | 206,000 | |||||
The General Partner | Equipment Liquidation Fee. With respect to each item of equipment sold by the general partner, a fee equal to the lesser of (i) 50% of the competitive equipment sale commission or (ii) three percent of the sales price for such equipment. The payment of this fee is subordinated to the receipt by the Limited Partners of (i) a return of their capital contributions and 10% annum cumulative return, compounded daily, on adjusted capital contributions and (ii) the net disposition proceeds from such sale in accordance with the Partnership Agreement. Such fee is reduced to the extent any liquidation or resale fees are paid to unaffiliated parties. During the years ended December 31, 2014 and 2013, the General Partner earned but waived approximately $0 and $2,000 of equipment liquidation fees, respectively. | $ | 9,000 | $ | 9,000 | |||||
The General Partner | Partnership Interest and Distribution. The General Partner has a present and continuing one percent interest of $1,000 in the Partnership’s item of income, gain, loss, deduction, credit, and tax preference. In addition, the General Partner receives one percent of Cash Available for Distribution until the Limited Partners have received distributions of Cash Available for Distribution equal to their Capital Contributions plus the 10% Cumulative Return and thereafter, the General Partner will receive 10% of Cash Available for Distribution. | $ | 24,000 | $ | 36,000 |
Notes_Payable_Schedule_of_Note
Notes Payable: Schedule of Notes Payable (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Tables/Schedules | |||||||||
Schedule of Notes Payable | |||||||||
December 31, | 2014 | 2013 | |||||||
Installment note payable to bank: interest rate of 5.25%, due in monthly installments of $7,441, including interest with final payment in July 2014 | $ | 0 | $ | 52,000 | |||||
Installment note payable to bank; interest rate of 4.23%, due in quarterly installments of $10,311 including interest with final payment in September 2015 | 30,000 | 69,000 | |||||||
Installment note payable to bank; interest rate of 4.23%, due in quarterly installments of $5,665, including interest, with final payment in June 2016 | 33,000 | 53,000 | |||||||
Installment note payable to bank; interest rate of 4.85%, due in quarterly installments of $35,894, including interest, with final payment in August 2016 | 240,000 | 0 | |||||||
Installment note payable to bank; interest rate of 4.23%, due in quarterly installments of $6,288, including interest, with final payment in December 2016 | 48,000 | 0 | |||||||
Installment note payable to bank; interest rate of 1.60%, due in monthly installments of $2,775, including interest, with final payment in March 2017 | 74,000 | 0 | |||||||
Installment note payable to bank; interest rate of 1.60%, due in monthly installments of $5,138, including interest, with final payment in April 2017 | 141,000 | 0 | |||||||
Installment note payable to bank; interest rate of 4.85%, due in quarterly installments of $7,699, including interest, with final payment in July 2017 | 87,000 | 0 | |||||||
Installment note payable to bank; interest rate of 4.23%, due in quarterly installments of $420, including interest, with final payment in August 2017 | 5,000 | 0 | |||||||
Installment note payable to bank; interest rate of 4.88%, due in monthly installments of $1,058, including interest, with final payment in October 2017 | 33,000 | 0 | |||||||
$ | 691,000 | $ | 174,000 |
Notes_Payable_Schedule_of_futu
Notes Payable: Schedule of future aggregate payments of notes payable (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Tables/Schedules | ||||
Schedule of future aggregate payments of notes payable | ||||
Year Ending December 31, | Amount | |||
2015 | $ | 351,000 | ||
2016 | 277,000 | |||
2017 | 63,000 | |||
$ | 691,000 |
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information: Schedule of non-cash investing and financing activities (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Tables/Schedules | |||||||||||
Schedule of non-cash investing and financing activities | Other noncash activities included in the determination of net loss are as follows: | ||||||||||
No interest or principal on notes payable was paid by the Partnership because direct payment was made by lessee to the bank in lieu of collection of lease income and payment of interest and principal by the Partnership. | |||||||||||
Noncash investing and financing activities include the following: | |||||||||||
Year ended December 31, | 2014 | 2013 | |||||||||
Debt assumed in connection with purchase of equipment | $ | 475,000 | $ | 65,000 | |||||||
Debt assumed and satisfaction of accrued expenses in 2014 in connection with acquisition of equipment in 2013 | $ | 408,000 | $ | - | |||||||
Accrued expenses incurred in connection with the purchase of technology equipment | $ | - | $ | 498,000 | |||||||
Accrual for distribution to partners paid in January 2015 | $ | 209,000 | $ | - | |||||||
Reconciliation_of_Amounts_Repo1
Reconciliation of Amounts Reported For Financial Reporting Purposes To Amounts On The Federal Partnership Return (unaudited): Schedule of The tax bases of the Partnership's net assets and liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Tables/Schedules | |||||||||
Schedule of The tax bases of the Partnership's net assets and liabilities | |||||||||
2014 | 2013 | ||||||||
Financial statement basis of net assets | $ | 2,030,420 | $ | 4,350,547 | |||||
Tax basis of net assets (unaudited) | -189,440 | 1,207,529 | |||||||
Difference (unaudited) | $ | 2,219,860 | $ | 3,143,018 |
Reconciliation_of_Amounts_Repo2
Reconciliation of Amounts Reported For Financial Reporting Purposes To Amounts On The Federal Partnership Return (unaudited): Schedule of Effective Income Tax Reconciliation (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Tables/Schedules | |||||||||
Schedule of Effective Income Tax Reconciliation | |||||||||
Years ended December 31, | 2014 | 2013 | |||||||
Net income (loss) for financial reporting purposes to taxable loss | $ | 68,431 | $ | -612,177 | |||||
Adjustments (unaudited) | |||||||||
Gain (loss) on sale of equipment | 177,058 | -15,110 | |||||||
Depreciation | 727,801 | 1,377,838 | |||||||
Amortization | 64,078 | 112,664 | |||||||
Unearned lease income | -24,159 | -149,232 | |||||||
Penalties | 185 | 951 | |||||||
Bad debts | -4,435 | -407,895 | |||||||
Other | -17,320 | 14,421 | |||||||
Taxable income (loss) on the Federal Partnership return (unaudited) | $ | 991,639 | $ | 321,460 |
Business_Details
Business (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Entity Incorporation, State Country Name | Commonwealth of Pennsylvania | |
Entity Incorporation, Date of Incorporation | 6-Jan-06 | |
Partners' Capital Account, Units, Redeemed | 565 | 4,774 |
Partners' Capital Account, Redemptions | $3,411 | $39,762 |
Recovered_Sheet5
Summary of Significant Accounting Policies: Disclosure of Fair Value of Financial Instruments: Fair Value Measurements, Recurring and Nonrecurring (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant, and Equipment, Fair Value Disclosure | $75,000 | $68,000 |
Fair Value, Inputs, Level 2 | ||
Property, Plant, and Equipment, Fair Value Disclosure | $75,000 | $68,000 |
Recovered_Sheet6
Summary of Significant Accounting Policies: Cash and Cash Equivalents: Schedule of Cash and Cash Equivalents (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Details | ||
Cash | $151,000 | $31,000 |
Cash, FDIC Insured Amount | -151,000 | -31,000 |
Cash, Uninsured Amount | $0 | $0 |
Capital_Equipment_Details
Capital Equipment (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Asset Impairment Charges | $41,000 | $48,000 |
Remarketing Fees Incurred | 32,000 | 32,000 |
RemarketingFeesPaid | 0 | 61,000 |
Equipment Shared | 6,006,000 | 6,066,000 |
Total Shared Equipment | 13,135,000 | 13,646,000 |
Debt Shared | 471,000 | 174,000 |
Outstanding Debt Total | $1,443,000 | $455,000 |
Capital_Equipment_Schedule_of_1
Capital Equipment: Schedule of future minimum rentals on non-cancelable leases (Details) (USD $) | Dec. 31, 2014 |
Details | |
Capital Leases, Future Minimum Payments Receivable, Next Twelve Months | $1,451,000 |
Capital Leases, Future Minimum Payments Receivable, Rolling Year Two | 493,000 |
Capital Leases, Future Minimum Payments, Receivable in Three Years | 85,000 |
Capital Leases, Future Minimum Payments Receivable | $2,029,000 |
Finance_Leases_Schedule_of_net1
Finance Leases: Schedule of net investment in direct financing leases (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
MinimumLeasePaymentsFinanceLeases | $135,000 | $98,000 |
Finance Leases, Initial Direct Costs | 4,000 | 4,000 |
Finance Leases, Allowance for bad debt | 0 | 0 |
ResidualValueFinanceLeases | 19,000 | 11,000 |
Investment in direct financing leases, unearned income | -17,000 | -15,000 |
NetInvestmentInFinanceLeases | $141,000 | $98,000 |
Schedule_of_Finance_Lease_Risk1
Schedule of Finance Lease Risk Level (Details) | Dec. 31, 2014 |
Details | |
RiskLevelModerate | 100.00% |
TotalRiskLevel | 100.00% |
Schedule_of_future_minimum_ren1
Schedule of future minimum rentals on non-cancellable finance leases (Details) (USD $) | Dec. 31, 2014 |
Details | |
Capital Leases, Future Minimum Payments Due, Next Twelve Months | $46,000 |
Capital Leases, Future Minimum Payments Due in Two Years | 45,000 |
Capital Leases, Future Minimum Payments Due in Three Years | 39,000 |
Capital Leases, Future Minimum Payments Due in Four Years | 5,000 |
Capital Leases, Future Minimum Payments Due | $135,000 |
Significant_Customers_Schedule2
Significant Customers: Schedule of Lessees equal to or exceeding 10% of lease revenue (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Percent Lease Revenue | 11.00% | |
Cummins, Inc. | ||
Percent Lease Revenue | 22.00% | 16.00% |
Aetna Life Insurance | ||
Percent Lease Revenue | 17.00% | 14.00% |
Cargill, Inc. | ||
Percent Lease Revenue | 12.00% | 12.00% |
Significant_Customers_Schedule3
Significant Customers: Schedule of Lessees equal to or exceeding 10% of lease income receivable (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Aerojet General Corporation | ||
Percent Lease Income Receivable | 47.00% | |
Motorola, Inc. | ||
Percent Lease Income Receivable | 27.00% | 10.00% |
Cargill, Inc. | ||
Percent Lease Income Receivable | 26.00% | |
Alliant Techsystems | ||
Percent Lease Income Receivable | 11.00% | 17.00% |
Related_Party_Transactions_Sch1
Related Party Transactions: Schedule of Related Party Transactions (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Equipment Acquisition fees earned by General Partner | $31,000 | $3,000 |
Equipment Acquisition Fees | 34,000 | 49,000 |
Other LP Expense | 305,000 | 427,000 |
Reimbursable Expenses | 628,000 | 805,000 |
Debt placement fees | 9,000 | 1,000 |
Equipment Management Fee | 155,000 | 206,000 |
Equipment liquidation fees waived | 0 | 2,000 |
Equipment liquidation fee | 9,000 | 9,000 |
Partnership Interest and Distribution | $24,000 | $36,000 |
Notes_Payable_Schedule_of_Note1
Notes Payable: Schedule of Notes Payable (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Long-term Debt, Gross | $691,000 | $174,000 |
Note 1 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 5.25% | |
Debt Instrument, Payment Terms | due in monthly installments of $7,441, including interest | |
Debt Instrument, Maturity Date, Description | final payment in July 2014 | |
Long-term Debt, Gross | 0 | 52,000 |
Note 2 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments of $10,311 including interest | |
Debt Instrument, Maturity Date, Description | final payment in September 2015 | |
Long-term Debt, Gross | 30,000 | 69,000 |
Note 3 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments of $5,665, including interest | |
Long-term Debt, Gross | 33,000 | 53,000 |
Note 4 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.85% | |
Debt Instrument, Maturity Date, Description | final payment in August 2016 | |
Long-term Debt, Gross | 240,000 | 0 |
Note 5 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments of $6,288, including interest | |
Long-term Debt, Gross | 48,000 | 0 |
Note 6 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 1.60% | |
Debt Instrument, Payment Terms | due in monthly installments of $2,775, including interest | |
Long-term Debt, Gross | 74,000 | 0 |
Note 7 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 1.60% | |
Debt Instrument, Payment Terms | due in monthly installments of $5,138, including interest | |
Debt Instrument, Maturity Date, Description | final payment in April 2017 | |
Long-term Debt, Gross | 141,000 | 0 |
Note 8 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.85% | |
Debt Instrument, Payment Terms | due in quarterly installments of $7,699, including interest | |
Long-term Debt, Gross | 87,000 | 0 |
Note 9 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | |
Debt Instrument, Payment Terms | due in quarterly installments of $420, including interest | |
Debt Instrument, Maturity Date, Description | final payment in August 2017 | |
Long-term Debt, Gross | 5,000 | 0 |
Note 10 | ||
Debt Instrument, Description | Installment note payable to bank | |
Debt Instrument, Interest Rate, Stated Percentage | 4.88% | |
Debt Instrument, Payment Terms | due in monthly installments of $1,058, including interest | |
Long-term Debt, Gross | $33,000 | $0 |
Notes_Payable_Schedule_of_futu1
Notes Payable: Schedule of future aggregate payments of notes payable (Details) (USD $) | Dec. 31, 2014 |
Details | |
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $351,000 |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 277,000 |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 63,000 |
Long-term Debt | $691,000 |
Supplemental_Cash_Flow_Informa2
Supplemental Cash Flow Information: Schedule of non-cash investing and financing activities (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Debt assumed in connection with purchase of computer equipment | $475,000 | $65,000 |
Debt assumed and satisfaction of accrued expenses in connection with acquisition of equipment | 408,000 | |
Accrued expenses incurred in connection with the purchase of technology equipment | 498,000 | |
Accrual for distribution to partners | $209,000 |
Supplemental_Cash_Flow_Informa3
Supplemental Cash Flow Information (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Details | ||
Fully Amortized Fees Written Off | 144,000 | 307,000 |
Allowance for Doubtful Accounts Receivable, Write-offs | $5,000 | $408,000 |
Fully Depreciated Equipment Wrote-Off | 403,000 | 2,122,000 |
Asset Impairment Charges | $41,000 | $48,000 |
Reconciliation_of_Amounts_Repo3
Reconciliation of Amounts Reported For Financial Reporting Purposes To Amounts On The Federal Partnership Return (unaudited): Schedule of The tax bases of the Partnership's net assets and liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Details | ||
Net assets, financial statement basis | $2,030,420 | $4,350,547 |
Net assets, tax basis | -189,440 | 1,207,529 |
Net assets, difference between financial statement basis and tax basis | $2,219,860 | $3,143,018 |
Reconciliation_of_Amounts_Repo4
Reconciliation of Amounts Reported For Financial Reporting Purposes To Amounts On The Federal Partnership Return (unaudited): Schedule of Effective Income Tax Reconciliation (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | |||
Details | ||||
Net loss for financial reporting purposes to taxable loss | $68,431 | ($612,177) | ||
Gain (loss) on sale of equipment, basis reconciliation | 177,058 | -15,110 | ||
Depreciation, basis reconciliation | 727,801 | 1,377,838 | ||
Amortization | 64,078 | 112,664 | ||
Unearned Lease Income, basis reconciliation | -24,159 | -149,232 | ||
Penalties | 185 | 951 | ||
Allowance for Loan and Lease Loss, Recovery of Bad Debts | -4,435 | -407,895 | ||
Other Reconciliation differences | -17,320 | [1] | 14,421 | [1] |
Taxable income (loss) on the Federal Partnership return (unaudited) | $991,639 | $321,460 | ||
[1] | The BAdjustments B OtherB includes financial statement adjustments that will be reflected on the tax return in the subsequent year. |