Revaluation account is an account that is prepared to record changes in the values of assets and liabilities during the admission, retirement, or death of a partner. It is used to determine the net profit or loss on revaluation of assets and liabilities, including those items that are unrecorded into books. The revaluation account is prepared at the time of admission of a new partner or in case of death or retirement of a partner. The profit or loss on revaluation of each asset and liability is moved to this account, and its balance is transferred to the capital account of the old partners in their old profit sharing ratio. If the revaluation account finally displays a credit balance, it stipulates net profit, and if it displays a debit balance, it stipulates net loss. The balance of the revaluation account, which may be either profit or loss, is transferred to the old partners’ capital accounts, as the new partner has no right over such profits earned prior to their admission.