LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Amalgamation problems

Prachi Srivastava (Finance) (368 Points)

04 November 2014

Hi All,

Entries of "Incorporation of assets and liabilities taken over" in Purchase method and Pooling of interest method for accounting of transferee companies are very similar... with very minute differences.. I am finding difficult to identify both. Can anyone please help me on this.

Reply
Follow
Share

1 Replies

CA Abhishek Goyal (Chartered Accountant) (504 Points)
Replied 04 November 2014

Hello.

As per my opinion, In Purchase method, While incorporating assets and liabilities in the books of accounts of the transferree co., any difference between this, trated as Goodwill or a Capital Reserve but in Pooling of Interest method you can not create Goodwill or Capital Reserve rather you adjust the Losses with the reserves.