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1. Revaluation A/c Dr.
To assets A/c (decrease )

2. Assets A/c Dr.
To revaluation A/c (increase)

3. Unrecorded assets A/c Dr.
To revaluation A/c

ii.) For increase / decrease of liabilities or unrecorded liabilities :-
1. Revaluation A/c. Dr.
To liabilities A/c (increase )

2. Liabilities A/c Dr.
To Revaluation A/c (decrease)

3. Revaluation A/c Dr
To unrecorded liabilities A/c

iii.) Revaluation A/c shows profit or loss :-
1. Revaluation A/c. Dr. (in profit)
To Old partners’ capital A/c (in old ratio)

2. Old partners’ capital A/c. Dr. (in loss)
To revaluation A/c (in old ratio)

Adjustment of Capital:

I.In the event of Admission of a Partner, adjustments are made for change
in values of assets and liabilities, goodwill and distribution of reserves,

accumulated profits and losses, change in partners’ capitals.

ii. Also, if the partners decide total capital of the firm and also that the capital
shall be in profit sharing ratio of the partners, then also capital of the partners

has to be adjusted.

III In case the partners’ capital(s) fall(s) short or has shortage of the required

capital, then such partner(s) will have to bring more capital.