| Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies. Basis of Presentation Principles of Consolidation Variable interests are investments or other
interests that absorb portions of a variable interest entity’s (“VIE”) expected losses or receive portions of
the Partnership’s expected residual returns and are contractual, ownership, or other pecuniary interests in a VIE that change
with changes in the fair value of the VIE. An entity is considered to be a VIE if any of the following conditions exist. (1) The
total equity investment at risk is insufficient to permit the legal entity to finance its activities without additional subordinated
financial support; or (2) As a group, the holders of equity investments at risk lack any of the three characteristics of a controlling
financial interest: (a) The direct or indirect ability through voting or similar rights to make decisions that have a significant
effect on the success of the legal entity. The equity holders at risk are deemed to lack this characteristic if: i. the voting
rights of some investors are not proportional to their obligation to absorb the expected losses of the legal entity or rights to
receive expected residual returns; and ii. substantially all of the legal entity’s activities are either involved with or
are conducted on behalf of an investor that has disproportionately few voting rights (b) The obligation to absorb the expected
losses of the legal entity or (c) The right to receive the expected residual returns of the legal entity. An entity that is determined
to be a VIE is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is determined to be the
party that has both the power to direct the activities that most significantly affect the VIE’s economic performance (“Power”)
and the obligation to absorb losses of, or the right to receive benefits from the VIE, that could potentially be significant to
the VIE (“Benefits”). The determination of whether a reporting entity is the primary beneficiary involves complex and
subjective analyses. As of September 30, 2020 and December 31, 2019, there were no VIEs. Use of Estimates Cash and Cash Equivalents The Partnership’s cash and cash equivalents
are held principally at one financial institution and at times may exceed federally insured limits. The Partnership has placed
these funds in a full service commercial financial institution in order to minimize risk relating to exceeding insured limits. Credit Risk Asset Impairments Lease Classification and Revenue Recognition The Partnership leases equipment to third parties
and each such lease may be classified as either a finance lease or an operating lease. Initial direct costs are capitalized and
amortized over the term of the related lease for a finance lease. For an operating lease, initial direct costs are included as
a component of the cost of the equipment and depreciated. For finance leases, the Partnership records,
at lease inception, the total minimum lease payments receivable from the lessee, the estimated unguaranteed residual value of the
equipment upon lease termination, the initial direct costs, if any, related to the lease and the related unearned income. Unearned
income represents the difference between the sum of the minimum lease payments receivable plus the estimated unguaranteed residual
value, minus the cost of the leased equipment. Unearned income is recognized as finance income over the term of the lease using
the effective interest rate method. For operating leases, rental income is recognized
on the straight line basis over the lease term. Billed and uncollected operating lease receivables will be included in accounts
receivable. Accounts receivable are stated at their estimated net realizable value. Rental income received in advance is the difference
between the timing of the cash payments and the income recognized on the straight line basis. The investment committee of the Investment
Manager approves each new equipment lease, financing transaction, and lease acquisition. As part of this process it determines
the unguaranteed residual value, if any, to be used once the acquisition has been approved. The factors considered in determining
the unguaranteed residual value include, but are not limited to, the creditworthiness of the potential lessee, the type of equipment
being considered, how the equipment is integrated into the potential lessees’ business, the length of the lease the industry
in which the potential lessee operates and the secondary market value of the equipment. Unguaranteed residual values are reviewed
for impairment in accordance with the Partnership’s policy relating to impairment review. The residual value assumes, among other things,
that the asset will be utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace
are disregarded, and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held
in quantity, simultaneously or to dispose of the asset quickly. The residual value is calculated using information from various
external sources, such as trade publications, auction data, equipment dealers, wholesalers and industry experts, as well as inspection
of the physical asset and other economic indicators. Finance Lease Receivables, Net and Allowance
for Doubtful Lease Accounts Collateralized Loans Receivable,
Net The allowance for loan losses is evaluated
on a regular basis by the Investment Manager and is based upon the Investment Manager’s periodic review of the collectability
of the receivables in light of historical experience, changes in the composition and risk characteristics of the collateralized
loan portfolio, adverse situations that may affect the borrower’s ability to repay, other loan specific information,
and the estimated value of any underlying collateral (net of estimated selling costs). This evaluation is inherently subjective
as it requires estimates that are susceptible to significant revision as more information becomes available. At September 30, 2020
and December 31, 2019, it was determined that an allowance for loan losses was not needed. Income Taxes The Partnership is subject to the Bipartisan
Budget Act of 2015 (“BBA”), which, among other requirements, stipulates that any tax liability incurred based on an
IRS tax examination will become due by the Partnership versus the partners of the Partnership. The Partnership, at its discretion,
will be able to seek repayment from its partners or treat as a distribution of the individual partners’ account to satisfy
this obligation. The Partnership will treat any liability incurred as a deduction to equity. As of September 30, 2020, there were
no expected liabilities to be incurred under the BBA. The Partnership has adopted the provisions
of Financial Accounting Standards Board’s (“FASB”) Topic 740, Accounting for Uncertainty in Income Taxes. Per Share Data Foreign Currency Transactions Depreciation Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13,
Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”),
which requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using
an expected credit loss model (referred to as the current expected credit loss (CECL) model). Under this model, entities will estimate
credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument. Current
US GAAP is based on an incurred loss model that delays recognition of credit losses until it is probable the loss has been incurred.
Accordingly, it is anticipated that credit losses will be recognized earlier under the CECL model than under the incurred loss
model. ASU 2016-13 was to be effective for fiscal periods beginning after December 15, 2019 and must be adopted as a cumulative
effect adjustment to retained earnings. In July 2019, the FASB decided to add a project to its technical agenda to propose staggered
effective dates for certain accounting standards, including ASU 2016-13. The FASB has approved an approach that ASU 2016-13 will
be effective for Public Business Entities that are SEC filers, excluding smaller reporting companies such as the Partnership, for
fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. For all other entities, including
smaller reporting companies like the Partnership, ASU 2016-13 will be effective for fiscal years beginning after December 15, 2022,
including interim periods within those fiscal years. For all entities, early adoption will continue to be permitted; that is, early
adoption is allowed for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (that
is, effective January 1, 2019, for calendar-year-end companies). On November 15, 2019, the FASB delayed the effective date of FASB
ASC Topic 326 for certain small public companies and other private companies. As amended, the effective date of ASC Topic 326 was
delayed until fiscal years beginning after December 15, 2022 for SEC filers that are eligible to be smaller reporting companies
under the SEC’s definition, as well as private companies and not-for-profit entities. Nothing in this staff interpretation
3 should be read to accelerate or delay the effective dates of the standard as modified by the FASB. The Partnership is currently
evaluating the impact of this guidance on its interim condensed consolidated financial statements. In February 2016, the FASB issued new guidance
to improve consolidation guidance for legal entities, ASU 2016-02, Leases (Topic 842): Amendments to the FASB Accounting Standards
Codification (“ASU 2016-02”), effective for fiscal years beginning after December 15, 2018 and interim periods within
those years. Early adoption was permitted. ASU 2016-02 amends the existing accounting standards for lease accounting, including
requiring lessees to recognize most leases on their balance sheets, and makes targeted changes to lessor accounting. The new leases
standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial
application, with an option to use certain transition relief. The Partnership has adopted ASU 2016-02 on January 1, 2019 and determined
there was no significant impact on its interim condensed consolidated financial statements of initial application. Management does not believe that any other
recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the interim condensed
consolidated financial statements. |
