Sk. Abdul Aziz (CA - Final) (811 Points)
23 May 2011Is it compulsory to re-value assets and liabilities at the time of retirement of a partner?
Kindly answer with relevant reference of law.
Rounak Chawla
(CA Final Student)
(291 Points)
Replied 24 May 2011
yes it is compulsary to revalue....as per Indian partnership Act,1932
d reason behind it is dat d assets in book of A/c are recorded at historical cost but on d date of retirement we need to make sure dat d out going partner neither gets benefit of over-valued assets nor suffers loss due to undervalued-assets
so v compare d book value wid d actual fair market value n adjust it accordingly...also d continuing partners are eligible for post-rtetiremnt profits/losses...all d pre-retiremnt profits/losses belong to all d partners....so revaluation must b done at the time of retiremnt so as to give a correct pictre of d affairs...
hope ur query is resolved...
25 Hours GST Scrutiny of Return and Notice Handling(With Recording)
Survey, Search and Seizure under Income Tax Act 1961
CAclubindia
