Question

Q7. Give the two circumstances in which Sacrificing Ratio may be applied?

Answer 1

When a new partner is admitted to the firm so to know the fact the how much the partners are sacrificing their shares in the favour of the new partner, sacrificing ratio may be applied.
For distributing amount of Goodwill when brought by the new partner in the firm, sacrificing ratio of the old partners may be applied.





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Answer 2

Circumstances in which sacrificing Ratio may be applied are: (i) At the time of admission of a new partner for distributing goodwill brought in by the new partner. (ii) For adjustment goodwill in case of change in Profit - sharing ratio of existing partners.]

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