Retirement of Partner

All the issues that need adjustment in case of retirement of a partner are similar to that in case of admission of a new partner but ..............

New profit sharing ratio can sometimes be given in case of retirement or the share of gain to remaining partners can guide us to calculate new profit sharing ratio.

There can be case of hidden goodwill in case of retirement also, that can be calculated the same way as in case of admission of a partner and should be shared by all the partners including the retiring partner.

Accumulated Profits, Reserves and Specific Funds and accumulated losses must be shared among the partners.

Four methods of payment to retiring partner
On retirement of a partner his capital is adjusted for goodwill, accumulated profits, revaluation of assets and liabilities etc. to determine the final amount to be paid, which may […]

Adjust the surplus/deficiency through cash or partner’s current account as per the instruction given in the question otherwise to bring cash in case of deficiency and to return cash in case of surplus.

Partners' Capital accounts can be fixed or fluctuating depending on the question.

All the Accumulated profits/losses should be shared in old profit sharing ratio or as instructed in the question, so, should not be taken to the new balance sheet, if already distributed.