Difference between Sacrificing Ratio and Gaining Ratio class 12

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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

BasisSacrificing RatioGaining Ratio
MeaningIt 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.)
ObjectiveIt 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 CalculateIt 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 CalculationSacrificing Ratio = Old Profit Sharing Ratio – New Profit Sharing RatioGaining Ratio = New Profit Sharing Ratio – Old Profit Sharing Ratio.
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Anurag Pathak
Anurag Pathak

Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his youtube channel and can download the Android & ios app for free lectures.

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