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About Statutory Reserves

In a company's BS under Equity Shareholders Fund (ESF) comes a. Share Capital b. Reserves and Surplus Statutory Reserves like Export Profit Reserve and Investment Allowance Reserve form part of Reserves and Surplus. but above mentioned stat reserves aren't actually ESF in their truest forms, are they? if the company gets amalgated and taken over in nature of purchase, will those reserves be exhausted by being transfered to ESH's a/c like General reserves and P&L? No, right? They have to be incorporated in transferee's BS. My question is why are these reserves part of Equity Sh's fund if at the time of amalgation, the equity shareholders of transferor arent getting the benefits of these reserves?


Kumarjit Dey

Kumarjit Dey

CA Inter

4K+

02-Nov-20

48

Answers (1)

The transferee company does it by passing a book entry. The reserves of transferor company belong to shareholders.


Suraj Lakhotia

Suraj Lakhotia

Admin

03-Nov-20

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