Distinguish between Realization Account and Revaluation Account?

Revaluation Account:

1. Meaning: Revaluation Account records the effect of re-valuation of assets and liabilities.
2. Purpose:It is prepared to find out the net profit/loss on re-valuation.
3. When Prepared: It is prepared at the time of admission, retirement or death of a partner.
4. Contents: In this account only changes in assets and liabilities are recorded.
5. Preparation of Account: This account may be prepared at a number of occasions during the life of a firm.
6. Profit or Loss: The Profit/Loss on revaluation is transferred to old partners capital, accounts in the profit Sharing ratio.

Realization Account:

1. Meaning: Realization Account records the realization of assets and settlement of liabilities.
2. Purpose: It is prepared for determining net profit/loss on realization of assets and settlement of liabilities.
3. When Prepared: It is prepared at the time of dissolution of the firm.
4. Contents: In this account all assets and liabilities are recorded.
5. Preparation of Account: This account is prepared only once during the life of a firm.
6. Profit or Loss: The Profit/Loss on realization is transferred to all partner’s capital accounts.