On retirement of a partner, remaining partner will share the goodwill in their profit sharing ratio.

Question

State whether the following statement are true or false with reasons.

On retirement of a partner, remaining partner will share the goodwill in their profit sharing ratio.

Answer 1

This statement is False.

On retirement of a partner, after giving retiring, partner’s share in goodwill and if goodwill is written off, then remaining partners will adjust the goodwill in their new profit sharing ratio. (If raised to full extent and written off)