Partnership accounts

235 views 4 replies
In case of preparing memorandum revaluation account ... why we are dividing the profit in to new PSR
Replies (4)

Because we wanted to understand the fair value of net assets of the firm & wanted to estimate the profit portion which needs to be paid by the new partner to existing partners.

 

Thank You sir 😊

But still i have some doubts regarding this

what is the reason behind the payment of profit by the new partner?

New partner wanted to join in a partnership & share the future profits of the firm. Then new partner needs to pay full consideration for the efforts taken by the old partners for the development of firm up to that level. So that's the reason why the new partner is making payment to old partners.

For example, Land purchased by old partners @ 1,00,000 in 1898

As on the date, the land value will be 10,00,000. The profit will be 9,00,000. If any person wanted to join the firm then he needs to pay his share of profit to new partners so that he will obtain the share in the land as per the profit sharing ratio.

 

Thank you so much sir 😊

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 24 June 2026
CA Article Trainee

Rahul Dang & Associates

Pune

CA Inter

View Details
Company
14 July 2026
Senior Executive/ Manager

H S SHARMA AND CO

Pune

CA Final

View Details
Company
ARTICLESHIP 15 July 2026
CA Articles

Kinjal H Shah & Co.

Mumbai

CA Foundation

View Details
Company
Featured 18 July 2026
CA Articleship

apricus india

Mumbai

CA Inter

View Details
Company
Featured 16 July 2026
Semi Qualified Company Secretary

Vakilsearch.com

Chennai

CS

View Details
Company
ARTICLESHIP 16 July 2026
Article Assistant

Sahil Agarwal & Company

Mumbai

CA Inter

View Details
Company
ARTICLESHIP 16 July 2026
CA Article

Pipara & Co. LLP.

Mumbai

CA Inter

View Details
Company
ARTICLESHIP 30 June 2026
Taxation Content Writer Intern

Interactive Media Pvt Ltd.

New Delhi

CA Inter

View Details