Practicing Success
At the time of admission of partner if goodwill exist in the books of account it will be written off among: |
Old partners in sacrificing ratio All the partners in new ratio New partners in gaining ratio Old partners in old profit sharing ratio |
Old partners in old profit sharing ratio |
Goodwill appearing in the books will be written-off by debiting old partners' capital accounts in their old profit sharing ratio. Thereafter new value of goodwill will be given effect by crediting sacrificing partners' capital accounts and debiting new partners' current account. |