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    Accounting For Partnership Firms (Retirement of An Existing Partner) - Accountancy Basics - Max Lino Payyampallil

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    Accounting For Partnership Firms (Retirement of An Existing Partner) - Accountancy Basics - Max Lino Payyampallil

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    Max Lino Payyampallil
    10 views12 pages
    Prepared during my CBSE higher secondary studies. For enquiries, email to [email protected] or DM in Instagram https://www.instagram.com/maxlinopayyampallil/

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    Accounting for Partnership Firms (Retirement of an existing partner) - Accountancy Basics - Max Lino Payyampallil

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    Prepared during my CBSE higher secondary studies. For enquiries, email to [email protected] or DM in Instagram https://www.instagram.com/maxlinopayyampallil/

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    10 views12 pages

    Accounting For Partnership Firms (Retirement of An Existing Partner) - Accountancy Basics - Max Lino Payyampallil

    Uploaded by

    Max Lino Payyampallil
    Prepared during my CBSE higher secondary studies. For enquiries, email to [email protected] or DM in Instagram https://www.instagram.com/maxlinopayyampallil/

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 12

    CBSE CLASS XII ACCOUNTANCY

    Accountig for Partnership Firms

    RETIREMENT OR
    DEATH OF A
    PARTNER
    ©
    2020
    P4
    Max Lino Payyampallil
     When a partner retire from a partnership form it is termed as retirement of a partner
     On the retirement of a partner the existing partnership comes to an end and the partnerships
    form is reconstituted with different terms and conditions.
     A partner may retire from the Firm :

    A. If there is an agreement to that effect between the partners.


    B. With the consent of all other partners.
    C. By giving a return notice to the remaining partners of his intention to retire in case of
    partnership at will Sec 32(1)
    LIABILITY OF A RETIRING
    PARTNER
    1. Liability of the firm’s act before his retirement
    The retiring partner continues to be liable for all the acts of the Firm up to the date of his
    retirement.
    However Hi may be discharged from his liability why an agreement between himself third party
    and the remaining partners Sec 32(2)
    2. Liability of the firm’s act after retirement
    The retiring partner continues to be liable for the acts of the firm even after his retirement until
    public notice of his retirement has been given either by himself or by other partners. Sec 32 (3),
    (4)
    ADJUSTMENTS REQUIRED ON
    RETIREMENT OF
    PARTNERSHIP
     Determination of NPSR and gaining ratio
     Accounting treatment of goodwill
     Accounting treatment of reserves and accumulated profit on losses
     Revaluation of assets and reassessment of liabilities
     Settlement of amount due to the retiring partner
     Capital adjustment (if agreed between the partners)
    DETERMINATION OF NPSR
    AND GAINING RATIO
     On the retirement of a partner his share is taken over by the remaining partners
     it necessity the calculation of NPSR of the remaining partners and the gaining ratio
     NPSR on the retirement of a partner is the ratio in which the remaining partners decide to
    share the future profits and losses.
     Gaining ratio is the ratio in which the remaining partners acquire the share of the retiring for
    the deceased partner.
    ACCOUNTING TREATMENT OF
    GOODWILL
     At the time of the retirement of the partner gave his share of profit
     so the gaining partner should compensate the retiring partner in the form of goodwill

    Retiring partner’s Goodwill = Value of firm’s Goodwill * share of profits sacrificed.


    ACCOUNTING TREATMENT OF
    RESERVES AND ACCUMULATED PROFITS
    OR LOSSES
    ACCOUNTING TREATMENT ON
    REVALUATION OF ASSETS AND
    REASSESSMENT OF LIABILITIES
    #Refer the chapter “some important ratios”
    SETTLEMENT OF AMOUNT
    DUE TO THE RETIRING
    PARTNER
    DEATH OF A PARTNER
    Calculation of deceased partner’s share of profit
    Next

    DISSOLUTION OF A
    PARTNERSHIP FIRM

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