Retirement or Death of a Partner: Accounting Treatment and Adjustments

The compilation of these Accountancy Notes makes students exam preparation simpler and organised.

Reconstitution of a Partnership Firm – Retirement/Death of a Partner

One major change in the constitution of a partnership firm may occur if a partner undergoes retirement from the firm or in the event of his death. In both cases, the partner’s account will have to be settled, and new ratios will have to be calculated. There is also the issue of the treatment of goodwill. Let us study these aspects further.