Gaining Ratio and Sacrificing Ratio – Difference

DescriptionGaining RatioSacrificing Ratio
Formula for calculationNew profit Sharing Ratio Less Old Profit Sharing ratioOld profit sharing Ratio Less New profit Sharing Ratio
When calculateda) Retirement of a Partner b) Change in profit sharing ratio among existing partnersa) Admission of a partner b) Change in profit sharing ratio among existing partners
Impact on share of profitsThe share of remaining partners increasesThe share of existing partners decreases
ObjectiveMainly used to find the goodwill share that the remaining partners will pay to the retiring partnerMainly used to find the amount of goodwill that the incoming partner will pay to the existing partners
Gaining ratio and Sacrificing ratio – Difference

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