What will be the treatment of contigent reserve in case of dissolution ,retirement and admission ?

Dear Student,

At the time of Admission

(a) No related liability: Reserve is distributed among old partners in old ratio
(b) Related liability (Liability < Reserve): Excess reserve is distributed among old partners in old ratio​
(c) Related Liability (Liability > Reserve): Deficit (loss after setting off claim from reserve) is debited to Revaluation A/c

Note: In case (b) and (c), Liability/claim is also shown in the Balance Sheet

At the time of Retirement/Death

(a) No related liability: Reserve is distributed among all partners in old ratio
(b) Related liability (Liability < Reserve): Excess reserve is distributed among all partners in old ratio​
(c) Related Liability (Liability > Reserve): Deficit (loss after setting off claim from reserve) is debited to Revaluation A/c

Note: In case (b) and (c), Liability/claim is also shown in the Balance Sheet

At the time of Dissolution

(a) No related liability: Reserve is distributed among all partners in profit sharing ratio
(b) Related liability (Liability < Reserve): Excess reserve is distributed among all partners in profit sharing ratio​ & reserve to the extent of liability is credited to Realisation A/c and liability is paid on the debit side of Realisation A/c
(c) Related Liability (Liability > Reserve): Entire reserve is credited to Realisation A/c​ and liability is paid on the debit side of Realisation A/c