Private Equity & Investment Funds

How to Record a Capital Call and LP Funding Receipt

Recording the receipt of called capital from Limited Partners in response to a capital call notice issued by the General Partner to fund a new portfolio investment or fund expenses.

Account Name	Type	Debit ($)	Credit ($)
Cash & Cash Equivalents	Asset (+)	5,000,000.00	-
LP Capital Contributions Receivable	Asset (-)	-	5,000,000.00

💡 Accountant's Note

When the GP issues a capital call notice, a receivable is established against each LP's unfunded commitment. Upon receipt of wire transfers from LPs, the receivable is extinguished and cash is recognized. The capital is recorded as a contribution to partners' capital, not revenue.

Practitioner & Systems Framework

💻 ERP Architecture

Most fund accounting platforms (Allvue, Investran, Geneva) maintain a capital account ledger per LP. The call amount is allocated pro-rata to each LP's capital account based on their committed percentage. Ensure the call notice date and funding due date are tracked separately for default interest calculations.

⚠️ Audit Flags

Auditors will reconcile LP capital account statements to the subscription agreements and the LP register. Unfunded commitment schedules will be tested for accuracy against the LPA (Limited Partnership Agreement).

📄 Required Documentation

Capital call notice, LP subscription agreements, wire transfer confirmations, LP commitment schedule showing funded vs. unfunded commitments.

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