Archive | Amalgamation

Amalgamation: Definition, Objectives and Types | Company

In this article we will discuss about:- 1. Meaning of Amalgamation 2. Definition of Amalgamation 3. Amalgamation and Absorption 4. Objectives 5. Comparative Position of Types of Amalgamations. Meaning of Amalgamation: Amalgamation is a form of combination. Amalgamation is a blending of two or more existing undertaking into one undertaking, the shareholders of each blending […]

Amalgamation of a Company: 2 Types | Accounting

The following points highlight the two main types of amalgamation of a company. The types are:- 1. Amalgamation in the Nature of Merger 2. Amalgamation in the Nature of Purchase. Type # 1. Amalgamation in the Nature of Merger: An amalgamation in the nature of merger should, according to the Accounting Standard – 14, satisfy […]

Top 4 Methods of Purchase Consideration | Amalgamation

The amount of purchase consideration can be computed under any of the following four methods:- 1. Lump Sum Method 2. Net Worth or Net Assets Method 3. Net Payment Method 4. Intrinsic Value Method (Shares Exchange Method). Method # 1. Lump Sum Method: The purchasing company may agree to pay a lump-sum to the vendor […]

Amalgamation, Absorption and Reconstruction | Accounting

Here is a compilation of top five accounting problems on amalgamation, absorption and reconstruction with its relevant solutions. Illustration 1:   The Balance Sheet of Z Ltd. and A ltd. as on September 30, 2006 are given below: A Ltd. propose to take over Z Ltd. on the following terms: (1) A Ltd. will issue […]

Amalgamation: Meaning and Types of Amalgamation

The below mentioned article provides a study note note on the Meaning and Types of Amalgamation. Meaning of Amalgamation: In order to reap the economies of scale and to reduce or eliminate competition, two or more than two joint stock companies may combine their undertakings and becomes one joint stock company. It may be done […]

Top 2 Methods of Accounting for Amalgamation

The following points highlight the top two methods of accounting for amalgamation. The methods are: 1. Pooling of Interests Method 2. Purchase Method. 1. Pooling of Interests Method: This method is followed in case of an amalgamation in the nature of merger. Under this method, the assets, liabilities and reserves of the transferor company are […]

External Reconstruction and Amalgamation

The upcoming discussion will update you about the difference between External Reconstruction and Amalgamation. From the point of view of an accountant, external reconstruction is similar to amalgamation in the nature of purchase; the books of the transferor company are closed and in the books of the transferee company, the purchase of the business is […]

Disclosure and Consideration for Amalgamation

The below mentioned article provides a note on the Disclosure and Consideration for Amalgamation. Disclosures made for Amalgamations: For all amalgamations, the following disclosures should be made in the first financial statements following the amalgamation: (a) Names and general nature of business of the amalgamating companies; (b) Effective date of amalgamation for accounting purposes; (c) […]

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