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Reconstitution of Partnership : Retirement of a Partner — Syllabus

ICSE · Class 12 · Accountancy

What Reconstitution of Partnership : Retirement of a Partner covers in ICSE Class 12 Accountancy: 4 topics, for the 2026-27 session.

39 questions40 flashcards7 formulas & key relations5 concepts

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4 Topics · ICSE Class 12 Accountancy · 2026-27

Topics in Reconstitution of Partnership : Retirement of a Partner

1

1. Meaning and Effect of Retirement

  • Retirement of a partner means to discontinue to be a partner in the firm.
  • The partner leaving the firm is called the retiring partner or outgoing partner.
  • After retirement, the old partnership ends but the firm continues with the remaining partners.
2

2. Goodwill on Retirement

  • A retiring partner is entitled to his share of goodwill because the firm has earned goodwill through the efforts of all partners.
  • As per Accounting Standard 26, goodwill can be recorded in the books only when consideration in money or money’s worth has been paid for it.
  • Only purchased goodwill can be recorded in the books.
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3. Revaluation of Assets and Liabilities

  • At retirement, assets and liabilities are revalued so that the retiring partner gets a fair share.
  • A Revaluation Account or Profit and Loss Adjustment Account is prepared.
  • In retirement, revaluation profit or loss is shared by all partners including the retiring partner.
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4. Undistributed Profits, Losses, and Reserves

  • Accumulated profits and losses appearing in the books must be accounted for on retirement.
  • Undistributed profits such as General Reserve and Profit and Loss Account credit balance are transferred to partners’ capital/current accounts in old ratio.
  • Undistributed losses such as debit balance of Profit and Loss Account are written off to partners’ capital/current accounts in old ratio.

Key Concepts

Central concept: Retirement of a Partner in a Partnership Firm

Meaning of retirementLegal modes of retirementEffect of retirementProfit sharing ratiosGoodwill treatmentRevaluation of assets and liabilitiesUndistributed profits and lossesSpecific reserves and funds

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Frequently Asked Questions

What are the important topics in Reconstitution of Partnership : Retirement of a Partner for ICSE Class 12 Accountancy?
Key topics in Reconstitution of Partnership : Retirement of a Partner include Meaning and Effect of Retirement, Goodwill on Retirement, Revaluation of Assets and Liabilities, Undistributed Profits, Losses, and Reserves. Study these first, then practise questions on each for the ICSE Class 12 board exam.
How should I revise Reconstitution of Partnership : Retirement of a Partner for the ICSE Class 12 board exam?
Learn the core ideas first, then work through the 39 practice questions on Reconstitution of Partnership : Retirement of a Partner. Revise definitions regularly and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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