Computation of purchase consideration
CA Juhi (Student) (47 Points)
19 September 2016
Rehaan
( CA Final)
(59 Points)
Replied 20 September 2016
No. Debentures iessued to the amalgamating company's debenture holders will not be considered as purchase consideration as the debenture holders are not considered as owners of the company. If debentures are issued to the amagamating company's shareholders then it can be considered as purchase consideration,.
Nitish Agrawal
(CA)
(810 Points)
Replied 20 September 2016
Agreed with Rehaan...one more point is that even if shares are issued to debenture holders then also it will not be considered as purchase consideration.
CA Juhi
(Student)
(47 Points)
Replied 23 September 2016
There is difference between treatment of debenture in purchase consideration and mode of payment of the same....
while computing the purchase consideration the debentures are not considered but again in case of mode of payment the payment to debenture holders is taken into account. ?
Please explain me.
Nitish Agrawal
(CA)
(810 Points)
Replied 23 September 2016
Rightly said by Ravi, anything, be it shares or debentures, given to shareholders of amalgamating company then it will be considered; but if the receipent is debentureholder then it will not be considered.
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