Distinguish between Sacrificing Ratio and Gaining Ratio.

Basis of Difference

Sacrificing ratio

Gaining Ratio

1. Meaning

It is the ratio in which old partners agree to sacrifice their share of profit in favour of new partners/partner

It is the ratio in which continuing partner acquires the share of profit from outgoing partner/partner

2. Calculation

Sacrificing Ratio = Old Ratio – New Ratio

Gaining Ratio = New Ratio – Old Ratio

3. Time

It is calculated at the time of admission of new partners/partner.

It is calculated at the time of retirement/death of old partners/partner.

4. Objective

It is calculated to ascertain the share of profit and loss given up by the existing partners in favour of new partners/partner.

It is calculated to ascertain the share of profit and loss acquired by the remaining partners (of the new firm in case of retirement) from the retiring or deceased partner.

5. Effect

It reduces the profit share of the existing partners.

It increases the profit share of the remaining partners.

1.Sacrifice ratio is calculated at the time of admission of new partner but gaining ratio is calculated at the time of retirement of a partner. 2. Total  of each old partner's Sacrifice will be equal to new ratio of new admitted partner. total of gaining share of each partner will be equal to the old ratio of retired partner.3. Goodwill will be distributed at the time of admission in sacrifice ratio. Goodwill will be distributed at the time of retirement in gaining ratio.

Sacrificing Ratio- Proportion in which old partners sacrifice their share in favour of new partner.

 

Gaining Ratio- Proportion in which continuing partner gain the share of outgoing partner on his retirement.

 

 

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1. Sacrifice ratio is calculated at the time of admission of new partner but gaining ratio is calculated at the time of retirement of a partner. 2. Total  of each old partner's Sacrifice will be equal to new ratio of new admitted partner. total of gaining share of each partner will be equal to the old ratio of retired partner.3. Goodwill will be distributed at the time of admission in sacrifice ratio. Goodwill will be distributed at the time of retirement in gaining ratio.4. Difference of old ratio and sacrifice ratio will be new ratio but total of old ratio and gaining ratio will be new ratio.

 

 

 

1. Sacrifice ratio is calculated at the time of admission of new partner but gaining ratio is calculated at the time of retirement of a partner. 2. Total  of each old partner's Sacrifice will be equal to new ratio of new admitted partner. total of gaining share of each partner will be equal to the old ratio of retired partner.3. Goodwill will be distributed at the time of admission in sacrifice ratio. Goodwill will be distributed at the time of retirement in gaining ratio.4. Difference of old ratio and sacrifice ratio will be new ratio but total of old ratio and gaining ratio will be new ratio. - See more at: http://education.svtuition.org/2010/06/difference-between-sacrifice-ratio-and.html#sthash.EO8kLNkP.dpuf

A ratio is calculated at the time of admission of a new partner is called sacrificing ratio.

A ratio is calculated at the time of death or retirement of a partner is called gaining ratio.

These ratios are used in Partnership. At the time of enterance of any new partner, the calculation is called sacrificing ratio while at the time of retirement the calculation is called gaining ratio.

Sacrificing ratio: Sacrificing ratio is calculated at the time of admission of new partner. It is the proportion in which old partners sacrifices their share in favour of new partner.

Gaining ratio: Gaining ratio is calculated when an old partner is retired. It is the proportion in which existing partners gain the share of retiring partner

Sacrificing ratio = the existing partners who will loose the profit sharing ratio

Gaining Ratio = The remining partners who will benefit the profit sharing ratio

Good answer from all 

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