Give any three points of distinction between sacrificing and gaining ratio.

Answer:
 
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.
 
 

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