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Chapter Notes - Reconstitution of a Partnership Firm: Admission of a Partner - Accountancy, Class 12
https://edurev.in/studytube/chapter-notes-reconstitution-of-a-partnership-firm-admission-of-a-partner-accountancy-class-12/d658fcdd-7232-45cb-b695-9359c4b90c85_t
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what is admission of a partner? how the admission of a partner can tak...



Admission of a Partner:
Admission of a partner refers to the process of introducing a new partner into an existing partnership firm. It involves the introduction of a new partner's capital, profit-sharing ratio, and mutual rights and duties among the partners.

How the Admission of a Partner can take place:
  • Agreement: The existing partners must agree to admit a new partner into the firm. This agreement should be formalized through a partnership deed.
  • Valuation of Assets and Liabilities: The assets and liabilities of the firm are revalued to determine the new partner's share in the profits and losses.
  • Adjustment of Capitals: The existing partners' capital accounts are adjusted to reflect the new partner's capital contribution.
  • Profit-sharing Ratio: The profit-sharing ratio among the partners is revised to accommodate the new partner.
  • Goodwill: The value of goodwill of the firm is determined and adjustments are made in the capital accounts accordingly.
  • Revaluation Account: A revaluation account is prepared to record any changes in the value of assets and liabilities.
  • Balance Sheet: The balance sheet of the firm is adjusted to reflect the admission of the new partner.


In conclusion, the admission of a partner involves various steps such as agreement, valuation of assets and liabilities, adjustment of capitals, revision of profit-sharing ratio, treatment of goodwill, preparation of a revaluation account, and adjustment of the balance sheet. It is essential to follow these steps accurately to ensure a smooth transition for the new partner in the partnership firm.

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