On what basis is a deceased partner’s share of revaluation profit determined?

Correct answer: Old profit-sharing ratio

Profit or loss arising from revaluation is distributed among the partners in the old profit-sharing ratio applicable before the reconstitution. Therefore, the deceased partner is credited with his or her share in that old ratio up to the date of death. The new ratio applies only to the continuing partners after reconstitution, so option B is incorrect. Exam tip: For revaluation at retirement or death, use the old profit-sharing ratio unless the partnership agreement specifies otherwise.