Admission of New Partner changes the partnership composition and requires accounting adjustments. Reasons: Expansion of business, Bringing in capital, Acquiring expertise/skills. Key Issues: Goodwill treatment (value of existing business), Revaluation of assets and liabilities, Adjustment of profit-sharing ratio, Capital contributions of new partner. Goodwill Calculation: Goodwill = Net Profit × Years (or Average Profit Method). New Partner's Share of Goodwill: Goodwill × New Partner's Share = Amount to be paid. Treatment: Goodwill may be paid in cash to existing partners (credited to their capital accounts in old ratio), Or retained in partnership (credited in new profit-sharing ratio). Revaluation of Assets/Liabilities: Prepare Revaluation Account showing increases/decreases to asset values. Adjustments: Debit Revaluation Account for increases in liability values (decrease to asset values), Credit for increases in asset values, Transfer surplus/loss to partners' capital accounts in old ratio. Capital of New Partner: Determine total capital of partnership after admission. New Partner's investment: Credit Capital Account with amount brought in. Old Partners' Capital Adjustment: Adjust to proportionate share of total capital (if needed). Balance Sheet After Admission: Show revised partners' capital accounts, Include goodwill if retained (at reduced value showing write-down), Disclose new profit-sharing ratio. Exam tip: Master goodwill calculation and recording; understand revaluation accounting; practice capital adjustments for new partner; know difference between goodwill paid and retained.