in News Departments > New & Noteworthy
print the content item

In a recent case study on partnership deal structuring, Dennis Moritz, principal at financial structuring and analysis software firm Advantage for Analysts, explored the impact of gross and net reallocation methods on financial returns and deficit restoration obligation (DRO) risk. According to the study, the gross reallocation method for limiting capital account deficits, although more complex to model, created significantly greater benefits to all parties.

"A Case for Partnership Reallocation Methods" demonstrated that extending DRO balances can increase returns while increasing risks. The gross reallocation method, however, helps mitigate this risk by remedying DRO balances quicker than the net reallocation method.

"Although both methods comply with the U.S. Tax Code, modelers may be unaware of the limitations of the net reallocation method; or they may want to avoid the greater effort associated with modeling the gross reallocation method," says Moritz. "Our study demonstrates that the net reallocation method can hinder the development of a viable structure or limit yield and/or risk objectives. The gross reallocation method, however, increases the likelihood of developing feasible deal structures."

For more information, go to advantageforanalysts.com



Helukabel_id1908
Latest Top Stories

Report Disputes U.S. Agency's Renewable Energy Projections

A new analysis from the Sun Day Campaign says renewables are slated to provide 16% of U.S. generating capacity by 2018 - over 20 years earlier than forecast by the Energy Information Administration.


Kansas Renewables Mandate Survives Yet Another Attack, But Is It Too Early To Celebrate?

Over the past three years, some legislators have tried to either weaken or repeal the state's renewable portfolio standard, which requires Kansas utilities to reach 20% renewables by 2020.


AWEA Highlights U.S. Wind Success Stories Of 2013

Despite a 92% drop in new capacity last year, the sector still has myriad reasons to celebrate, according to a new report from the American Wind Energy Association.


Feds List New Bird Species As Threatened - Should Wind Developers Be Worried?

The U.S. Fish and Wildlife Service is designating the lesser prairie-chicken as threatened under the Endangered Species Act. An expert explains how this might affect the wind industry.


Senate Committee Passes Bill With Two-Year PTC Extension

The Senate Finance Committee has voted on a tax extenders package, which includes both the production tax credit (PTC) and investment tax credit, and sent it to the floor.

UEA_id1896
WomenofWind_id
JLG_id1900
Acciona_id1907
AWEA_id1886
bonfiglioli_id1913