Yes
Benefit of Deferred Revenue Expenditure for New Partner
Deferred revenue expenditure refers to expenses that are incurred during the current accounting period but are recognized as assets and allocated over a period of time in the future. In the case of a partnership firm, if a significant amount is spent on advertising a product, it can be considered as a deferred revenue expenditure.
Explanation:
- When a new partner joins the partnership firm, they typically bring in new capital and resources to contribute to the growth of the business.
- The benefit of the deferred revenue expenditure incurred by the old partnership firm on advertising can be passed on to the new partner as it contributes to the overall goodwill and brand recognition of the business.
- The new partner can benefit from the increased sales and revenue generated as a result of the advertising expenditure, even though it was initially incurred by the old partnership firm.
- The new partner can also benefit from the enhanced reputation and customer loyalty that may have been built through the advertising efforts of the old partnership firm.
In conclusion, the new upcoming partner can indeed benefit from the deferred revenue expenditure made by the old partnership firm on advertising, as it contributes to the overall growth and success of the business.
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