Death of a partner Notes1

Study Material & Notes for the Chapter 7

Partnership - Death of a partner


A.  Meaning of Death of a Partner
  • Death of a partner is a compulsory retirement 
  • Death of a partner may occur any time unlike the retirement which normally takes place at the end of an accounting period.
B. New Profit-Sharing Ratio

New Profit-Sharing ratio is the ratio in which the continuing/remaining partners decides to the share the profits of the firm in future. It is decided as per the mutual agreement amongst the continuing/remaining partners.

C. Gaining Ratio:

The ratio in which remaining partners acquire retiring partner’s profit share is known as gaining ratio.

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