Hi goldstien8:
You're very welcome. Changing revenue / expense approaches shouldn't really cause any accounting issues that I can think of, except where you might be using these figures for internal comparison purposes over time, and in which case at least one expense category wouldn't, obviously, match the dollar amount for a prior period if you change expense treatments. However, with respect to income tax reporting, again it is really the "bottom line" that the IRS is going to be monitoring, as well as seeing that all of the "flow through" items of income, gains, losses, and deductions correctly are reported by the individual 1065 Partners (via Schedules K-1). How you get to that "bottom line" though, as long as any reasonable accounting treatment results in the same Net Income, is typically a decision left up to the discretion of company management (i.e., you). In other words, you shouldn't need to amend any prior year tax returns, because there has been no actual change in taxable income. The same should be true for your financial accounting records. Simply make the accounting change "prospectively," that is, going forward.
