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Accounts partnership capital adjustment

Others 729 views 2 replies

Abhishek Artwani

Student

25 Points Joined May 2012

Hi.

In IPCC in Accounts, when we do capital Adjustment in case of Admission (only), we calculate the balance of credit side of the old Partner's capital Accounts and then that amount is capital for their share (say 2/3)

My question is, do we also add Goodwill adjustment amount also while calculating credit side balance ??

Replies (2)

vineet kumar

Student CA IPC / IPCC

85 Points Joined October 2014

Dear

Abhishek

In case of capital aduestment of partnership firm at the time of admission...we shall add all free reserve,and also goodwill in partners capital a/c.

Regard

vineet kumar

kumarvineet994 @ gmail.com

Abhishek Artwani

Student

25 Points Joined May 2012

But are we not magnifying Goodwill also by doing this ? New partner is already bringing goodwill premium. Now to calculate capital why are we including goodwill adjustment amount. Because a part of this amount will eventually be brought by the new partner (so 2times goodwill brought by new partner)