Difference between Revaluation account and Memorandum Revaluation Account
|Basis||Revaluation Account||Memorandum Revaluation Account|
|Effect on Balance sheet||Revaluation Account is prepared when the assets and liabilities are shown in the new balance sheet at the revalued figures.||Memorandum Revaluation Account is prepared when the assets and liabilities are shown in the new balance sheet at their old or unaltered figures.|
|Parts||It is not divided into two parts. It is prepared to record the increase and decrease in the value of assets and liabilities.||It is divided into two parts. First part is prepared to record the increase or decrease in the value of assets and liabilities and the second part is prepared to nullify the changes in the first part.|
|Transfer of profit or loss||The balance of revaluation account(profit or loss) is transferred to Old Partners Capital Accounts in their old profit-sharing ratio.||The balance of first part (Profit or loss) is transferred to the Capital Accounts of Old Partners in their old profit-sharing ratio.The balance of second part is transferred to all Partners Capital Accounts (including new partner in case of admission and continuing partners in the case of retirement of a partner) in their new profit sharing ratio.|
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