# Admission of a Partner Notes, Class 12 Accountancy | SwaVid Admission of a Partner, NCERT Class 12 Accountancy: notes with key ideas, formats, common mistakes and 3 quick checks with worked answers. Canonical: https://www.swavid.com/cbse/class-12/accountancy/chapter/reconstitution-of-a-partnership-firm-admission-of-a-partner Source: https://www.swavid.com/cbse/class-12/accountancy/chapter/reconstitution-of-a-partnership-firm-admission-of-a-partner # Reconstitution of a Partnership Firm - Admission of a Partner ## Definitions, formats and formulas ## Key ideas ## Common mistakes ## Quick checks ## Keep going ## Questions parents ask ## Class 12 Accountancy on SwaVid ### Modes of reconstitution and admission ### Sacrificing ratio and new ratio ### Treatment of goodwill ### Revaluation of assets and liabilities ### Accumulated profits, reserves and losses ### Adjustment of capitals ### Next chapter ### Related chapter ### Related chapter ### All chapters SwaVid › CBSE › Class 12 › Accountancy › Reconstitution of a Partnership Firm - Admission of a Partner Notes written by SwaVid from the NCERT textbook. Class 12 Accountancy, NCERT Accountancy Part I: partnership firms. Key ideas, definitions and common mistakes. CBSE does not print marks for a single chapter. Short answer. This chapter explains the accounting adjustments required when a new partner joins an existing partnership firm. Students learn how to calculate new profit sharing ratios, revalue assets and liabilities, and treat goodwill and accumulated reserves. Source: NCERT Accountancy Part I: partnership firms (Reprint 2026-27) , Reconstitution of a Partnership Firm - Admission of a Partner A partnership firm is reconstituted whenever there is a change in the existing agreement among partners. Under Section 31 of the Indian Partnership Act 1932, a new partner can be admitted only with the consent of all existing partners, unless agreed otherwise. Incoming partners acquire their share of future profits from the old partners. The proportion in which the old partners surrender their share of profit in favour of the new partner is called the sacrificing ratio. Goodwill paid by a new partner represents compensation to sacrificing partners for surrendering part of their profit share. Self-generated goodwill is not recorded in the books as an asset; instead, incoming premium is credited directly to sacrificing partners in their sacrificing ratio. Assets and liabilities are revalued at admission so that the incoming partner does not suffer or benefit from past changes in values. The net profit or loss from the revaluation account is transferred strictly to the old partners' capital accounts in their old profit sharing ratio. Any undistributed profits, general reserves, or losses appearing on the balance sheet date belong entirely to the old partners. These balances are credited or debited to the old partners' capital accounts in their old ratio before the new partner joins. Partners may decide to adjust their capital balances in proportion to their new profit sharing ratio. Any deficit or surplus is settled either by bringing in or withdrawing cash, or by transferring the difference to current accounts. Try each question first. Then tap it to see the answer. Share acquired from A = (1/5) × (1/2) = 1/10 Share acquired from B = (1/5) × (1/2) = 1/10 A's new share = (3/5) - (1/10) = 5/10 B's new share = (2/5) - (1/10) = 3/10 C's share = 1/5 = 2/10 Ratio of A, B, and C = 5/10 : 3/10 : 2/10 = 5:3:2 5:3:2 Total goodwill premium brought by Z = Rs 12,000 X's share = 12,000 × (2/3) = Rs 8,000 Y's share = 12,000 × (1/3) = Rs 4,000 Journal entry: Premium for Goodwill A/c Dr. 12,000 / To X's Capital A/c 8,000 / To Y's Capital A/c 4,000 X gets Rs 8,000 and Y gets Rs 4,000 Decrease in stock = 40,000 - 35,000 = Rs 5,000 (debit Revaluation) Increase in building = 1,12,000 - 1,00,000 = Rs 12,000 (credit Revaluation) Net profit on revaluation = 12,000 - 5,000 = Rs 7,000 A's share of profit = 7,000 × (3/4) = Rs 5,250 Rs 5,250 profit Reconstitution of a Partnership Firm - Retirement/Death of a Partner . Accounting for Partnership: Basic Concepts . Dissolution of Partnership Firm . The 10 chapters of Class 12 Accountancy . CBSE does not give marks to one chapter. It prints marks for units or parts, and the chapter list page shows them all. No. They are written by SwaVid from the NCERT textbook. The CBSE curriculum is the reference for what is assessed. Reconstitution of a Partnership Firm - Retirement/Death of a Partner. SwaVid is an AI tutor for Indian students in Classes 6 to 12. It finds the earlier ideas a child missed, then teaches today’s chapter. Start free to see how it works. - NCERT NCERT book, Class 12 - 80 marks, theory paper - 3 quick checks - Distributing premium for goodwill in the old profit sharing ratio . Premium for goodwill must be credited strictly to the sacrificing partners in their sacrificing ratio, not their old profit sharing ratio. - Sharing revaluation profit or loss with the incoming partner . Revaluation reflects past value changes before admission, so the profit or loss is credited or debited solely to old partners in their old ratio. - Confusing unrecorded assets with existing assets . An unrecorded asset is directly debited to the asset account and credited to the revaluation account at its full agreed value. - Misinterpreting the phrases 'surrenders of his share' versus 'surrenders from his share' . If a partner surrenders a fraction 'of' their share, multiply their old share by that fraction; if they surrender a fraction 'from' their share, deduct that fraction directly. ## Key Links - [CBSE](https://www.swavid.com/cbse) - [Class 12](https://www.swavid.com/cbse/class-12) - [Accountancy](https://www.swavid.com/cbse/class-12/accountancy/chapters) - [Start free →](https://www.swavid.com/signup) - [All 10 chapters](https://www.swavid.com/cbse/class-12/accountancy/chapters) - [NCERT Accountancy Part I: partnership firms (Reprint 2026-27)](https://ncert.nic.in/textbook.php?leac1=0-4) - [Open notes](https://www.swavid.com/cbse/class-12/accountancy/chapter/reconstitution-of-a-partnership-firm-retirement-death-of-a-partner) - [Open notes](https://www.swavid.com/cbse/class-12/accountancy/chapter/accounting-for-partnership-basic-concepts) - [Open notes](https://www.swavid.com/cbse/class-12/accountancy/chapter/dissolution-of-partnership-firm) - [Class 12 Accountancy](https://www.swavid.com/cbse/class-12/accountancy/chapters) - [Start free →](https://www.swavid.com/signup)