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 a sufficient number of its [...]
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 either by one of the [...]
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 recorded by the transferee company [...]