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Amalgamation of companies
Accountancy
I have one doubt in amalgamation chapter If all the merger conditions satisfied bt provisions are created in inventory and b/r of selling company at the time of net asset computation then it will come under merger method or purchase method mam?
Answers (5)
Merger means two or more entities are combined ( not purchased/ sold) so there is no change in book value of assets and liabilities. For exam perspective: If question specifies purchase or merger - follow question. If not then check, ✔️ All assets and liabilities are taken over ✔️ No change in book value. ✔️ Purchase consideration paid to equity shareholders in equity shares. It is a merger. If any of the above answer is No, then it is purchase.
Jitendra Kumar
Merger means two or more entities are combined ( not purchased/ sold) so there is no change in book value of assets and liabilities. For exam perspective: If question specifies purchase or merger - follow question. If not then check, ✔️ All assets and liabilities are taken over ✔️ No change in book value. ✔️ Purchase consideration paid to equity shareholders in equity shares. It is a merger. If any of the above answer is No, then it is purchase.
Yes that's ok ..see in icai illustration 8 there is a change in the value of inventory and receivable , then it is purchase method ah ?
