Question

What is the difference between sacrifice ratio & gaining Ratio?

Answer 1

Difference between sacrificing ratio and Gaining ratio :

S. No.	Basis of Difference	Sacrificing Ratio	Gaining Ratio
1.	Meaning	It is the ratio in which the old partners surrender their share of profit in favour of the new prtner.	It is the ratio in which the remaning partners share the retiring partner's share of profit.
2.	When Calculated	It is calculated at the time of admission of a new partner.	It is calculated at the time of retirement or death of a partner.
3.	Object	The purpose of calculating sacrificing ratio is to goodwill payable to old partners at the time of admission of a partner.	The purpose of calculating gaining ratio is to calculate the share of goodwill payable to the retiring partner by each of the remaining partners.
4.	Effect on capital	Old Partner's Capital Account increase with the amount received as good will. New partners losses.	Retring partner gains. and remaining partner capital reduces, so they lose.
5.	Method of Calculation	It is calculated by deducting new ratio from the old ratio.	It is calculated by deducting old ratio from the new ratio.
6.	Accounting Treatment	New Partner's Capital A/c      Dr.... To Old Partner s capital A/c (In sacrificing ratio)	Remaining Partner's Capital A/c      Dr.... To Retiring Partner's capital A/c (In sacrificing ratio)