Why is the new partner not given a share in the old reserve created before his admission?

Correct answer: Because the reserve was created from profits earned before his admission

An old reserve is created from profits earned when the new partner was not yet a member of the firm. Hence, the new partner has no right to that past profit; the reserve is transferred to the old partners’ capital or current accounts in their old profit-sharing ratio. Exam tip: Treat reserves existing before admission as an item belonging to the old partners.