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what is mean by realisation account and why it is prepared in which time I should have the prepared what's the purpose of to prepare of that please explain me the clear view


REALIZATION AC
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Quick Summary
A realisation account is prepared when a firm dissolves to close its books and calculate the profit or loss from selling assets and settling debts. This profit or loss is then distributed among partners according to their profit-sharing ratio. While useful for understanding dissolution outcomes, it's worth noting that realisation accounting isn't part of Ind AS, and alternative methods like the Altman Z-score can be used to predict bankruptcy.

When the firm is dissolved, its books of a/c are to be closed and the profit or loss arising on realisation of its assets and discharge of liabilities is to be computed.
For this purpose a realisation a/c is prepared to ascertain the net profit or loss of realisation of assets and payment of liabilities which is transferred to partner's capital accounts in their profit sharing ratio.

Realisation accounting is not there in Indas. I like it to be redundant as well. Try the altman z score to predict bankruptacy. These scores work and ive done m score test on projection and it work like a babe. Visit my blogspot yasaswigomes.blogspot.com

@ Mitali Thank you Soo much

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