Adjustments on Retirement of a Partner

Following are the main adjustments required at the time of a partner from a partnership firm:

  1. Change in the profit sharing ratio.
  2. Accounting treatment of goodwill.
  3. Revaluation of assets and liabilities.
  4. Treatment of reserves and undistributed profits.
  5. Payment of amount due to retiring partner.
  6. Adjustment of capitals of the remaining partners.