Provisional

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This discussion addresses the treatment of profit shares in provisional accounts prepared as of 31.03.21, following a partner's retirement and admission during FY 20-21. The advice suggests keeping the old partner's profit share under liabilities, crediting the new partner's profit share to their capital account, and calculating shares based on their respective periods of involvement.

MAKARAND DAMLE

MAKARAND DAMLE (Querist)

22 July 2021 During F Y 20-21 one partner retired and one was admitted as on 30.06.20
Provisional accounts need to be prepared as on 31.03.21
My question is in provisional accounts as on 31.03.21 how will the treatment of share of profit to old, newly admitted and retired partner be shown ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

22 July 2021 For old partner profit keep it under liability. For new partner credit profit to capital account.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)

23 July 2021 Old partners share calculated as per the ratio, retired partner share was calculated in profits till 30.06.20 and new admitted partner share in profit after 30.06.2020 i.e for 9 months.

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