Retirement of Partner How to Prepare Profit and Loss Account

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VIPIN GUPTA (Querist)
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21 January 2022 Dear Sir,
There is a retirement of partner on 18/08/2020. How to deal with it. Do we have to prepare Profit or Loss Account and Balance Sheet or Can We prepare it on March 2021. As the firm is running in loss since 2017-18 till 2019-20 and the loss is Approx Rs 55 Lacs and in the Currrent year the Profit is Rs 29.50 Lacs for the F/y 2020-21. How To Charge Depreciation will we have to charge on proportionate basis while preparing 18/08/2020 Profit and loss Account or it will be charged only on March 2021 closing.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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22 January 2022 Financial statements has to be prepared in accordance with the clauses of the partnership deed , meaning thereby

* if accounts are to be closed on the date of retirement, per the partnership deed, two sets of financials has to be prepared wherein depreciation has to be provided proportionately.

* if no mention in the deed, per general presumption, one set of financial statements need to be prepared for the year 2020-21 wherein profit of the retired partner may be determined on time basis.