🎯Accounting Treatment of Reserves, Accumulated Profits, and Accumulated Losses on Change in PSR

When partners decide to change their profit-sharing ratio, fairness requires that all profits earned and losses incurred before the change should belong to the partners in their old profit-sharing ratio. Therefore, before the new ratio becomes effective, all reserves, accumulated profits, and accumulated losses must be adjusted among the existing partners. ✨ Reserves and accumulated profits such as General Reserve, Profit & Loss Account (Credit Balance), and Investment Fluctuation Reserve are distributed among the partners in their old ratio, as these amounts were generated during the period when the old ratio was in force. ⚠️ Accumulated losses and fictitious assets such as Profit & Loss Account (Debit Balance), Advertisement Suspense Account, and Deferred Revenue Expenditure are written off among the partners in their old ratio because these losses relate to past periods. 📌 Objective: To ensure that no partner gains or loses unfairly from profits or losses that arose before the change in the profit-sharing arrangement. 📖 In simple words: "Past profits and losses belong to the old partnership arrangement, while future profits and losses belong to the new arrangement." Thus, all adjustments relating to reserves, accumulated profits, and losses are made through the partners' capital accounts in the old profit-sharing ratio, ensuring equity and accuracy in partnership accounts. Jain Tutorials में आपका स्वागत है 🙏 यह चैनल खासतौर पर Commerce Students (Class 11th, 12th ,B.com, CA/CMA Foundation) और Competitive Exams की तैयारी करने वाले विद्यार्थियों के लिए बनाया गया है। यहाँ आपको आसान भाषा में मिलेगा – ✔️ Accounts (लेखांकन) ✔️ Business Studies (व्यवसाय अध्ययन) ✔️ Economics (अर्थशास्त्र) ✔️ Mathematics ✔️ Important Questions & MCQs ✔️ बोर्ड परीक्षा की तैयारी (CBSE & RBSE) ✔️ Competitive Exams Guidance 🎯 हमारा लक्ष्य है कि हर छात्र को सरल और समझ में आने वाली पढ़ाई मिले, ताकि वह अपने exams में अच्छे अंक ला सके और अपने करियर में आगे बढ़ सके। 📌 Regular Videos: Concept + Practice + Important Questions 📌 Useful for: Board Exams | CUET | Commerce Competitive Exams 👉 अगर आप Commerce के student हैं, तो अभी चैनल को Subscribe करें और अपनी तैयारी को मजबूत बनाएं 💪 #JainTutorials #CommerceClasses #Class11Commerce #Class12Commerce #Accounts #BusinessStudies #Economics #CommerceStudents #BoardExamPreparation #CUET #CommerceCoaching #StudyWithJainTutorials commerce classes class 11 commerce class 12 commerce accounts class 11 accounts class 12 business studies class 12 economics class 11 economics class 12 commerce coaching commerce tutorial accountancy basics bst notes economics notes commerce students india class 12 board preparation class 11 preparation commerce important questions commerce mcq cuet commerce preparation board exam commerce