| Summary of Significant Accounting Policies | 2.
Summary of Significant Accounting Policies Basis
of Presentation 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 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. Collateralized
Loans Receivable, Net Finance
Lease Receivables and Allowance for Loan and Lease Accounts 443,605 1,592,055 Long-lived
Asset Impairments 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 December 31, 2021,
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 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 financial statements. Management
does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect
on the financial statements. |
