Question

In admission an unrecorded asset is taken by a partner less than the actual value what treatment is done in revaluation A/C

Answer 1

At the time of admission of a new partner, the assets are re-valued and liabilities are reassessed. The assets are re-valued and liabilities are reassessed so that:

The assets are overstated or understated are revalued.

The liabilities are brought in the books at their correct values

Unrecorded assets and liabilities of the firm are brought into the books of the firm

The actual position of the firm is calculated.

Profit and loss arriving on account of such revaluation up to the date of admission of a new partner may be adjusted in the partner’s capital accounts in their old profit sharing ratio