How did it happen in the movie?
Gandalf the Grey returns to the Shire and meets up with the Hobbit Frodo Baggins, and his Uncle Bilbo. Bilbo is busy preparing a feast for his hundred-and-eleventh birthday, and tells Gandalf that after the celebrations he’ll leave the Shire for good.
The party itself is a great success, with lots of food, drink and entertainment. Meriadoc Brandybuck and Peregrin Took steal some of Gandalf’s fireworks and accidentally ‘release’ a red dragon, which creates some panic.
After the traditional speech, Bilbo disappears into thin air. He returns to Bag End, where he is confronted with a worried Gandalf, who reminds him of the fact that he’s leaving his magic ring behind. But Bilbo is reluctant, and Gandalf has to pull his Creepy Dude Trick on his old friend.
After Bilbo has left, Gandalf gives the Ring to Frodo and tells him to keep it secret and safe.

How did it happen in the book?
Bilbo Baggins, a famous but somewhat eccentric Hobbit, is about to celebrate his and his cousin Frodo‘s birthday a huge feast: Bilbo is turning hundred and eleven, an exceptional age for a Hobbit, and Frodo hits thirty-three, the age marking maturity.
In the week preceding the festivities, a party of Dwarves and Gandalf the Grey, a wandering wizard, arrive at Bag End to help.
The feast itself is amazing, with plenty of food and entertainment, and fireworks provided by Gandalf. After the traditional speech however, there is a flash and Bilbo simply disappears.
Gandalf follows him to Bag End, where the Hobbit has prepared everything to leave, for good. He is leaving everything, except a bundle and an old sword, to Frodo – but when it comes to the moment where he had to part with his old magic ring, which he took from Gollum during his quest to Erebor over fifty years before, he suddenly changes his mind. Gandalf can finally persuade him to leave the Ring behind, and after Bilbo has left he tells Frodo to keep it secret and safe, and to never use it.
But Frodo has other things on his mind: in the days after his uncle’s disappearance, he has to make sure the gifts Bilbo listed as an inheritance for his friends and relatives, end up with their rightful new owner.

Changes
– Frodo is introduced to us after we’ve already met Gandalf and Bilbo, at Bilbo’s birthday party.
– The party is not prepared by Hobbits from Hobbiton (like in the movie), but by Dwarves who stay with Bilbo, in Bag End, until he leaves.
– Gandalf arrives with tons of fireworks, but doesn’t light any of them before the party. At the party, there’s no Merry and Pippin pulling pranks with Smaug the Vividly Real either.
– The party itself takes place in several smaller tents, and one large one in which the great tree fits. We do see the tree, but the entire party takes place outdoors. The party is also in honour of Frodo’s thirty-third birthday, which is the coming of age for a Hobbit. This is not mentioned in the movie.
– The talk between Gandalf and Bilbo at the end of the chapter, when Bilbo is about to leave, was cut into two halves for the movie: there’s the kitchen scene and the farewell-sequence.
– Bag End is stuffed with packages, presents and travelling gear. It’s not exactly tidy in the movie either, but it’s certainly less crowded. The part where Frodo has to present everyone on Bilbo’s list with a present was omitted.
– After Bilbo’s speech, when he puts on his ring and disappears, Gandalf uses a little trick (there’s a flash of light) to make sure word doesn’t spread about the special powers of the ring. In the movie, this was omitted.

Mistakes
– When Gandalf enters Bag End, he bumps his head. This is actually Ian McKellen bumping his head in reality, but because he kept up his performance the shot was used afterwards.

Borrowed Lines
– When Frodo and Gandalf pass the party field, where the preparations have started already, Gandalf comments with ‘Oh! The long-expected party!’ This is of course the title of the chapter on which this sequence is based: 1.I. A Long-expected Party.
– Gandalf’s ‘So how is the old rascal? I hear it’s going to be a party of special magnificence.’ is taken from the book text, which reads ‘When Mr. Bilbo Baggins of Bag End announced that he would shortly be celebrating his eleventy-first birthday with a party of special magnificence, there was much talk and excitement in Hobbiton.’ [1.I.]
– Frodo’s ‘ Whatever you do, you’ve been officially labelled a disturber of the peace.’ is derived from Gandalf’s own line ‘They say I am a nuisance and a disturber of the peace.’ [1.I.]
– Gandalf’s ‘Riddles in the dark’ when he’s sitting by the fireside, is a reference to the Hobbit: ‘Riddles in the Dark’ is the chapter in which Bilbo encounters Gollum and finds the Ring.

Bookie Details
– The sign on Bilbo’s door, ‘No Admittance Except On Party Business’, is also used in the movie; you can see it here.
– The map lying about on the table in Bag End is an exact copy of the map that was featured in The Hobbit. It’s the map Thorin and his party used to travel to Erebor and find the way in.
– Bilbo offers Gandalf some wine, saying he has ‘a few bottles of the Old Winyard left. 1296 – a very good year. Almost as old as I am!’ This is taken from another scene in the same chapter, namely when Frodo is distributing gifts to Bilbo’s friends and relatives, Tolkien writes: ‘Old Rory Brandybuck, in return for much hospitality, got a dozen bottles of Old Winyards: a strong red wine from the Southfarthing, and now quite mature, as it had been laid down by Bilbo’s father’.
– The band playing at the beginning of the party, which features Pippin, is also mentioned in the book: halfway through the speech, when the audience is starting to get bored, ‘some of the young Tooks and Brandybucks, supposing Uncle Bilbo to have finished… now got up to an impromptu orchestra, and began a merry dance-tune’.
– Bilbo makes his speech standing under a huge tree, as he also does in the book.
– The song that both Gandalf (when he arrives on the cart) and Bilbo (when he leaves) sing, is based on the famous poem ‘The road goes ever on and on’.
– Two chapter titles are used in dialogue in this sequence, both by Gandalf: A Long-expected Party (the first chapter of Fellowship Of the Ring, on which this sequence is based) and Riddles In the Dark, the chapter in The Hobbit that tells the tale of how Bilbo found the Ring.