CUET Preparation Today
| On retirement of a partner, his share of goodwill is written off among continuing partners in which ratio? |
New Profit-sharing Ratio New Capital Ratio Gaining Ratio None of these |
| Gaining Ratio |
| The retiring or deceased partner is entitled to his share of goodwill at the time of retirement/death because the goodwill has been earned by the firm with the efforts of all the existing partners. Hence, at the time of retirement/death of a partner, goodwill is valued as per agreement among the partners the retiring/ deceased partner compensated for his share of goodwill by the continuing partners (who have gained due to acquisition of share of profit from the retiring/ deceased partner) in their gaining ratio. |
