Who is entitled to the gain arising from the revaluation increase in an asset before the admission of a new partner?

Correct answer: Old partners, in the old profit-sharing ratio

The increase in the asset occurred before the new partner joined, so the resulting revaluation profit belongs to the old partners. It is credited to their capital or current accounts in the old profit-sharing ratio. The new partner is not entitled to a profit earned before admission. Exam tip: Distribute revaluation profit or loss arising before admission in the old ratio.