Frequently Asked Questions on Redemption Fees

(1) What is the accounting treatment of redemption fees?: Some funds charge a redemption fee, a percentage of the redeeming partner's capital balance, as a penalty for redeeming before the end of the agreed lock-up period. To the extent received by the fund, the redemption fee amount is credited to the fund and debited to the redeeming partner's capital balance. (AAG 4.08)

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