Build vs new in Rails 3

You are correct, the build and new functions have the same effect of setting the foreign key, when they are called through an association. I believe the reason the documentation is written like this is to clarify that a new Client object is being instantiated, as opposed to a new active record relationship. This is the same effect that calling .new on a class would have in Ruby. That is to say that the documentation is clarifying that calling build on an association is the same is creating a new object (calling .new) and passing the foreign keys to that object. These commands are all equivalent:

Firm.first.clients.build
Firm.first.clients.new
Client.new(:firm_id => Firm.first.id)

I believe the reason .build exists is that Firm.first.clients.new might be interpreted to mean that you are creating a new has_many relationship object, rather than an actual client, so calling .build is a way of clarifying this.

build vs new:

mostly new and build are same but build stores object in memory,

eg:

for new:

Client.new(:firm_id=>Firm.first.id)

For build:

Firm.first.clients.build

Here clients are stored in memory, when save firm , associated records are also saved.

You're misreading the docs slightly. some_firm.client.new is creating a new Client object from the clients collection, and so it can automatically set the firm_id to some_firm.id, whereas the docs are calling Client.new which has no knowledge of any Firm's id at all, so it needs the firm_id passed to it.

The only difference between some_firm.clients.new and some_firm.clients.build seems to be that build also adds the newly-created client to the clients collection:

(some_firm = Firm.new).save # Create and save a new Firm
#=> true

some_firm.clients           # No clients yet
#=> []

some_firm.clients.new       # Create a new client
#=> #<Client id: nil, firm_id: 1, created_at: nil, updated_at: nil>

some_firm.clients           # Still no clients
#=> []

some_firm.clients.build     # Create a new client with build
#=> #<Client id: nil, firm_id: 1, created_at: nil, updated_at: nil>

some_firm.clients           # New client is added to clients
#=> [#<Client id: nil, firm_id: 1, created_at: nil, updated_at: nil>]

some_firm.save
#=> true

some_firm.clients           # Saving firm also saves the attached client
#=> [#<Client id: 1, firm_id: 1, created_at: "2011-02-11 00:18:47", updated_at: "2011-02-11 00:18:47">] 

If you're creating an object through an association, build should be preferred over new as build keeps your in-memory object, some_firm (in this case) in a consistent state even before any objects have been saved to the database.

build is just an alias for new:

alias build new

Full code can be found: https://github.com/rails/rails/blob/master/activerecord/lib/active_record/relation.rb#L74