28 May 2013
while solving sums of amalgamation, i don't understand which method should i use for calculation of purchase consideration in what kind of sum. please help me.
Guest
Guest
(Expert)
29 May 2013
You will understand this as soon as you are done with enough practice and self study.
There are two methods, i.e. Net payment basis and Net asset basis.
Now if the question says that the purchasing companies will issue 10000 equity shares at 100/- each then its amply clear that net payment method is to be applied.
If the question says that requisite number of equity shares will be issued each of 10/- each then net asset basis should be applied.
CAclubindia
