Difference between Sacrificing Ratio and Gaining Ratio class 12
Confused, What is the difference between Sacrificing Ratio and Gaining Ratio in class 12 Accountancy CBSE, ISC and State Board.
Don’t Worry, we have explained it in detail
Sacrificing Ratio vs Gaining Ratio (Differences and Comparison)
Let’s have a look
| Basis | Sacrificing Ratio | Gaining Ratio |
| Meaning | It is the ratio in which the old partners have sacrificed their profit shares in favour of the new or incoming partner. | It is the ratio in which the remaining partners take the outgoing (retired or deceased partner’s share.) |
| Objective | It is calculated to determine the amount of compensation to be paid by the incoming partner to the sacrificing partners as a premium for goodwill or goodwill. | It is calculated to determine the amount of compensation to be paid by each of the gaining partners to the outgoing partner as a premium for goodwill or goodwill. |
| When to Calculate | It is calculated at the time of admission of a new partner and on change in the profit sharing ratio. | It is calculated at the time of retirement of death of a partner and on change in the profit sharing ratio. |
| Method of Calculation | Sacrificing Ratio = Old Profit Sharing Ratio – New Profit Sharing Ratio | Gaining Ratio = New Profit Sharing Ratio – Old Profit Sharing Ratio. |
