Amagamation

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RUPA (Querist)
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08 September 2011 what should be done of reserve in amalgamation in nature of purchase,and amalagmation in nature of merger???hw to transfer reserve in purchaser's book???should be taken in realisation account or nt,in both method??? plss clear my doubt.. reserves effect in detail,plsss some one do reply..

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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22 September 2011 Amalgamation in the Nature of Merger (Pooling Interest Method)

1. Reserves of the transferor company shall be transferred to the transferee company.

2. Reserves shall be transferred to Realisation Account.

Amalgamation in the Nature of Merger (Purchase Method)

1. Reserves of the transferor company shall NOT be transferred to the transferee company.

2. Reserves shall NOT be transferred to Realisation Account. They shall be transferred to the Shareholders Account.

Hope your query is resolved.

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RUPA

RUPA (Querist)
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22 September 2011 tHANKS SIR,I HAV ONE MORE QUEStION SHALL I ASK U SIR

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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22 September 2011 Sure, I will try to reply.

RUPA

RUPA (Querist)
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22 September 2011 holding of share what the treatment in both company in amalgamation???

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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22 September 2011 Could not understand the question. Do you mean to say that both the companies are holding shares of each other?

RUPA

RUPA (Querist)
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22 September 2011 yes inter company holding

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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22 September 2011 A(Transferor) holds 1,000 shares in B(transferee).

B holds 2,000 shares in A out of 20,000

Purchase consideration to be satisfied by issue of 1 share for every 1 share held in A.

Books of B.

It will issue only 17000 shares because 1000 are already held by A and 2000 are held by B itself. B will not issue shares to itself

The shares held by it will be cancelled against the purchase consideration.

Books of A

Investment in B Ltd. will be cancelled against PC and balance shares will be recieved.

RUPA

RUPA (Querist)
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22 September 2011 thanks u sir for helping me ,i gt my answer...

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