— Kishore V, SME and ACW at Edumarz
The following are the many issues that need to be addressed when partners/partners retire.
1. Calculation of the firm’s new gaining ratio for all remaining partners.
2. Calculation of the firm’s new ratio with the remaining partners.
3. Calculation of the new firm’s goodwill and its accounting treatment
4. Revaluation of the new firm’s assets and liabilities.
5. Profits and losses, as well as reserves, are distributed among all partners (including the retiring partner).
6. Joint Life Policy Treatment(JLPT)
7. The sum owed to the retiring partner is settled.
8. The remaining partners’ capital accounts will be adjusted to reflect their new profit sharing ratio.