Gaining Ratio
Gaining Ratio is calculated at the time of retirement or death of partner. It is the excess of new ratio over old ratio of old partners except retire or dead partner.
Gaining Ratio = New Ratio- Old Ratio
We can understand this ratio as the share of profit which is given by retired partner to the partners who are still exist in partnership firm.
How can you make revaluation account
Revaluation account This account is very useful for calculating the profit or loss when partners decides to reconstruct their partnership firm. When a new partner comes in firm or exit from firm, making of this account is very necessary, I am giving the proforma of this account
Goodwill is a word which have some different meaning in accounting definitions. Definition of Goodwill Goodwill is an intangible asset which makes any organisation with his good name, by selling quality product, by selling product at less price. Goodwill can be earned by speaking sweat words to customer. An expert can tell about the correct value of Goodwill but in general IT is the excess of super profit over general profit. or If any concern is gaining more profit than his general rate of return then it means it is generating Goodwill.