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Pereira accounting

Pereira accounting is one of the two manners in California community property law that explains how to deal with community funds and/or labor is used to enhance the value of separate property. To calculate, courts will add the original principal amount of the business which is separate property to a reasonable rate of return expected from the nature of that business. The result is considered separate property. The remaining amount of the business is considered part of the community. This method is preferred when the management of the spouse was the primary cause of the growth or productivity of the business. In the case where the character of the business is the main reason for its growth and production, Van camp accounting should be used. [1]

  1. ^ Pereira v. Pereira, 156 Cal. 1 (California Supreme Court, 1909)