Pereira accounting

Meanings

1. In California community property law, a mechanism to deal with community funds and/or labor used to enhance the value of separate property. The original principal amount of the business which is separate property is added to a reasonable rate of return expected from the nature of that business, and the result is considered separate property, while 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.

Etymology

Named after a 1909 divorce case, Pereira v. Pereira.