XII Accountancy Chapter 3 & 4 Reconstitution of partnership | Page 4

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 .