Memorandum revaluation a/c

Dear Rohit,

In Revaluation method the assest and liabilitiues will apperar in the Balance sheet with the new values.  The Differences in the new value and old value would be adjusted in the capital accounts of old partners in the old profit sharing ratio through revalution account.  If the firm wants ot record the assest and liabilities at old values even after the revaluation, then memorandum revaluation method can be adopted.  This method is based on the principle that the benefits of loss of revaluation should first bee transfered to the capital accounts of the old partners in the old profit sharing Ratio.