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Advance accounts amalgamation
Accountancy
While combining the b/s of after amalgamation why dont we merge the free reserve of the selling company? It is also form part of shareholders fund ?please clarify
Answers (1)
The identity of transferor company's reserves is kept intact in merger method where Share holders holding not less than 90% of the face value of the equity shares of the transferor company become equity shareholders of the transferee company by virtue of the amalgamation. But under purchase method The identity of the transferor company'es reserves except statutory reserves is not kept intact because the same shareholders might not continue
