# US ARMA PARTNERS LP X-17A-5 (2019-06-12) — Broker-dealer annual report - Company: US ARMA PARTNERS LP - Form: X-17A-5 - Filed: 2019-06-12 - Period: 2019-03-31 - Accession: 0001329807-19-000001 - CIK: 1329807 - File #: 8-66964 - Material weakness: No - Auditor: EisnerAmper LLP - Auditor location: San Francisco, CA - Contact: Ed Smith - Phone: 415.246.7502 - Signed by: Ed Smith (FinOp) Original filing: https://www.sec.gov/Archives/edgar/data/1329807/000132980719000001/20190331ARPFUSAP5.pdf --- {0}------------------------------------------------ ### US ARMA PARTNERS, LP #### ST A TEMENT OF FINANCIAL CONDITION MARCI! 31, 2019 {1}------------------------------------------------ # **EISNERAMPER** EisnerAmper LLP #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the General Partner of US Arma Partners, LP #### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of US Arma Partners, LP as of March 31, 2019 and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the entity as of March 31, 2019 in conformity with accounting principles generally accepted in the United States of America. #### Basis for Opinion This financial statement is the responsibility of the entity's management. Our responsibility is to express an opinion on the entity's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the entity in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. We have served as the entity's auditor since 2012. (Note: Partners of Harb, Levy & Weiland LLP ("HLW") joined Eisner Am per LLP in 2012. HL W had served as the entity's auditor since 2007. EISNERAMPER LLP San Francisco, California June11,2019 {2}------------------------------------------------ ## US ARMA PARTNERS, LP Statement of Financial Condition March 31. 2019 | Cash | \$
473, 172 | |--------------------------------------------|----------------| | Accounts receivable | 19,430 | | Accounts receivable from affiliate | 118,423 | | Deposits | 254 | | Other current assets | 43,801 | | f ixcd assets, net | 5,560 | | Total assets | \$
660,640 | | Liabilities and Partners' Capital | | | Liabilities | | | Accounts payable and accrued liabilities | \$
63,282 | | Amo
unts payable to withdrawing partner | 15,793 | | Bonus payable | 62,566 | | Total liabilities | 141,641 | | Partners' capital | 518,999 | | Total liabilities ""'I partners 1 capital | \$
660,640 | {3}------------------------------------------------ #### US ARMA PARTNERS, LP Notes to Statement of Financial Condition March 31, 20 19 #### 1. Business and Summary of Significant Accounting Policies #### Business US Arm.a Partners, LP (the "Partnership") is a Delaware limited partnership formed in 2006. The Partnership is registered with the Securities and Exchange Commission ("SEC") as a fully disclosed securities broker-·dcaler and is a member of the Financ ial Industry Regu latory Authority, Inc. ("FINRA"). The Partnership is subject to various governmental rules and regulations including the Net Capital Ruic set forth in Rule l 5c3-1 of the Securities Exchange Act of 1934. Arma Partners, LLC serves as the general partner of the Partnership. All limited partners of the Partnership are also the members of Arma Partners, LLP ("UK Arma or Affiliate"), a United Kingdom-based limited liability partnership formed in March 2004. UK Arma is a broker-dealer regulated by the financial Conduct Authority in the United Kingdom. Arma Partners, LLC does not have any capital balance in the Pa11ncrship. Cash consists of cash in deposit accounts and a money market savings account with two commercial banks which at times may exceed federally insured limits. The Partnership has not experienced any losses in such accounts. At March 31, 20 19, the Partnership held £30,683 in a US bank account denominated in British Pounds equivalent to \$39,959 US Dollars. #### Revenue Recognition Effective April I, 20 18, the Partnership adopted the requirements of Financial Accounting Standard I3oard's ASU No. 2014-09, *Revenue.from Contracts Customers (Topic 606),* as amended, utilizing the modified retrospective transition method for its contracts. The Partnership completed its implementation analysis, including identification of revenue streams and reviews of customer contracts under ASU No. 2014-09 framework. The analysis included reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements under the new standard. The Partnership had evaluated the potential impacts of the new revenue recognition standards on its financial statements and has not identified any material changes in the timing ofrevenue recognition. The adoption or the new guidance for revenue recognition did not result in any changes to the financial statements for the year ended March 31, 2019. {4}------------------------------------------------ ### US ARMA PARTNERS, LP Notes to Statement of Financial Condition March 31, 20 19 ### I .Business and Summary of Significant Accounting Policies (continued) #### Revenue Recognition The Partnership earns a service income for having and making avaclable the knowledge and capability to provide certain administrative and consulting services, which represents a performance obligation which are provided and consumed simultaneously, to the Affiliate under an expense sharing agreement. lntercompany service income is earned monthly and is calculated based on direct costs incurred plus a 5% markup. Expense reimbursement is recorded on a gross basis. #### Recent Accounting Pronouncements In February 2016, the FASB issued ASU 20 16-02, Leases. The objective of the update is to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet fo!r leases with a lease term of more than 12 months. In addition, the update will require additional disclosures regarding key information about leasing arrangements. Under existing guidance, operating leases arc not recorded as lease assets and lease liabilities on the balance sheet. The update will be effective for fiscal years after December 15, 2019, with early adoption permitted. The Partnership is currently evaluating the impact of the adoption of this accounting guidance on its financial statements. #### Accounts Receivable Accounts receivable arc recorded at the invoked amount and generally do not bear interest. To the extent deemed necessary, the Partnership maintains an allowance for estimated losses from the inability of clients to make required payments. The collectability of outstanding invoices is continually assessed. In estimating the allowance, the Partnership considers factors such as historical collections, a client's current creditworthiness, age of the receivable balance and general economic conditions that may affect a client's ability to pay. #### fixed Assets Fixed assets are stated at cost and are depreciated using the straight-line method over estimated useful lives of three to five years. {5}------------------------------------------------ ### US ARMA PARTNERS, LP Notes to Statement of Financial Condition March 31, 201 9 ### 1.. Business and Summary of Significant Accounting Policies (continued) #### Income Taxes The Partnership elects to be treated as a pass-through entity for all relevant jurisdicti.ons and therefore files informational income tax returns which attribute taxable income and taxes paid, if any, to the partners. Management has concluded that the Partnership is not subject to income taxes in any jurisdiction and that there are no uncertain tax positions that would require recognition in the financial statements. Accordingly, no provision for income taxes is reflected in the accompanying financial statements. If the Partnership were to incur an income tax liability in the future, interest on any income tax liability would be reported as interest expense and penalties on any income tax liability would be reported as income taxes. Management's conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof as well as other factors. #### Use of Estimates The process of preparing the financial statement in confonnity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues and expenses. Such estimates primarily relate to unseltled transactions and events as of the date of the financial statement. Accordingly, upon settlement, actual results may differ from estimated amounts. #### Translation of Foreign Currencies The books and records of the Partnership are maintained in U.S. dollars. Assets and liabilities denominated in foreign currencies are translated at the rates of exchange prevai I ing at the date of the statement of financial condition. {6}------------------------------------------------ #### US ARMA PARTNERS, LP Notes to Statement of Financial Condition March 3 l, 20 l *9* #### 2. Indemnification The Partnership enters into contracts that contain a variety of indemnifications for which the maximum exposure is unknown. The Partnership has no current claims or losses pursuant such contracts. #### 3. f-ixed Assets, net Fixed assets, net consists of the following: | Computer and office equipment | \$142,830 | |-------------------------------|------------| | f-urniture | 39,687 | | | 182,517 | | Accumulated depreciation | ( 176,957) | | Fixed assets, net | \$5.560 | #### 4.. Net Capital Requirements The Pa1tnership is subject to the SEC Uni form Net Capital Rule (SEC Rule l 5c3-1 ), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to I. At March 3 U, 2019, the Partnership had net capital of \$329, 133 which was \$319,690 in excess of its required net capital of \$9,443. The Partnership's net capital ratio was 0.4303 to I. {7}------------------------------------------------ #### US ARMA PARTNERS, LP Noles to Statement of Financial Condition March 31, 2019 #### 5. Lease Obligation The lease agreement for premises in New York ends on September 30, 20 19. Future minimum lease payments as of March 31, 20 ~ 9 are as follows: April 2019-Scptembcr 2019 \$118,250 #### 6. Related Party Transactions The Partnership is party to an expense-sharing agreement with UK Arma, under which the Partnership is responsible for a portion of direct and indirect costs incurred in the provision of support services. The direct and indirect costs include a proportion of the office costs and supplies, marketing, legal, professional, and wages of the financial and administrative staff incurred by UK Arma that relate lo providing the services to the partnership in accordance with the agreement. The agreement also provides for the Partnership to reimburse UK Arma for any direct costs and time spent by UK Arma staff and members for performing any services on behalf of the Partnership. The agreement also provides for the Pa1tnership to reimburse UK Arma for the services of consultants who are independent contractors of UK Arma for performing any services on behalf of the Paitnership. Simi larly, UK Arma also reimburses the Partnership for time spent by the Partnership's staff and partners or for the services of consultants engaged by US Arma for performing any services on behalf of UK Arma. For the year ended March 3 I, 2019 only direct costs together w ith a 5% uplift were billed under the expense-sharing agreement. At March 3 1, 2019 the Partnership had a receivable from the affiliate of \$ 11 8,423 representing the amounts due from UK Arma for services provided in accordance with the expense sharing agreement. {8}------------------------------------------------ #### US ARMA PARTNERS, LP Notes to Statement of f inancial Condition March 3 I. 2019 #### 7. Financial Instruments not carried at fair Value | | | | | | | Total | |----------|------------|---------------|---------|-----|--------|------------| | | Carrying | | | | | Estimated | | ASSETS | Value | Level I | Level 2 | | Level3 | Fair Value | | Cash | \$473, 172 | \$473,
172 | \$ | | \$ | \$473, 172 | | Deposits | 254 | | | 254 | | 254 | | TOTALS | \$473,426 | \$473,
172 | \$254 | | \$ | \$473,426 | {9}------------------------------------------------ #### US ARMA PARTNERS, LP #### STATEMENT OF FINANCIAL CONDITION MARCH 31, 2019 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.