in patnership...when there is retirement of a patner the goodwill and profit and all the revalued assets are shared in existing ratio or gaining ratio....
Menu
Cpt
Replies (4)
get this link
https://gradestack.com/Fundamentals-of/Retirement-of-a-Partner/Calculation-of-New-Profit/22512-4466-55775-study-wtw
In the event of retirement, the retiring partner wants to get his share, out of the contribution he made during his term of service. What business owns is achieved with the combined effort of all the partners. And therefore it should be in existing ratio.
Due to his retirement the business cant sell his portion of share of assets inorder to pay him.
So the exisitng partners should bring in fund. It will not be fair if the remaining partners contribute equally, because, after retirement one or few other partners may have the benefit by increase in profit share; and therefore it should be on gaining ratio.
Hope you understood the relevance of "existing ratio" and " gaining ratio" in the event of retirement.
It is divided on the basis of the PSR that is decided as per the partnership deed.In the absence of any such agreement,they will be divided in the Capital Ratio.
*Gaining ratio=New ratio - old ratio
Recent Threads
- Form 121 requirement
- Interest on reversal of ITC when ITC balance avail
- Is MirrorFly an Instant Messaging Software?
- ITR filling for legal heir
- How Can I qualify CA Final Exam?
- Wrong reporting on 22 april 2026 under article inc
- Articeship Form 107
- TAN for Multiple States
- Delivery Challan serial number Issue and return ru
- After filing form 71 For TDS mismatch
Related Threads
CAclubindia
