When the balance sheet is prepared after the new partnership agreement, the assets and liabilities are recorded at:

Historical Cost Current Cost Realisable Value Revalued Figures

Revalued Figures

When a new partner is admitted into the partnership, assets are revalued and liabilities are reassessed. A revaluation account is opened for the purpose. This account is debited with all reduction in the value of assets and increase in liabilities and credited with increase in the value of assets and decrease in the value of liabilities. Revalued figure of assets and liabilities are then shown in the balance sheet after admission of new partner.