para 43, clause(d) of AS 14..extent of particulars in notes

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Manish (Querist)
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13 March 2009 Hi,

as per para 43, clause(d) of AS 14 particulars of the scheme of amalagamation sanctioned ubder a statute are to be given in notes to accounts.

is it the whole scheme which should be reproduced in notes? or to what extent these particulars should be given in notes.

pls. help...

Thanks

Manish

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 March 2009 Disclosure requirements are:-
1)Names,general nature of business of amalgamating companies, effective date.
2)Method of accounting.
3)Particulars of scheme-statutorily sanctioned.
If pooling of interest is adopted:-
1)Description and number of shares issued.
2)% of equity shares exchanged to give effect to amalgamation.
3)Difference between consideration and NAV,treatment.
If purchase method is adopted:-
1)Consideration paid,and contingently payable.
2)Difference between consideration and NAV,treatment
3)Amortisation period of goodwill,if any.

Manish

Manish (Querist)
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13 March 2009 Hi,

i know the disclosure requirements, pls. read the query agian, its very specific.

Regds,

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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09 August 2024 Under **Paragraph 43(d) of Accounting Standard (AS) 14**, which deals with "Accounting for Amalgamations," specific requirements are outlined for the disclosure of the scheme of amalgamation in the financial statements. Here’s how you should address the particulars of the scheme of amalgamation in the notes to the accounts:

### **Disclosure Requirements as per AS 14:**

**1. **General Requirements:**
- **Particulars of the Scheme:** The disclosure should provide details of the amalgamation scheme that has been sanctioned under the statute. This does not mean reproducing the entire scheme but providing sufficient particulars to ensure clarity and completeness.

**2. **Extent of Disclosure:**
- **Summary of Key Elements:** Instead of reproducing the entire scheme, you should summarize key elements and major terms of the scheme of amalgamation. This includes:
- **Date of the Scheme:** When the scheme was sanctioned or approved.
- **Parties Involved:** Names of the companies involved in the amalgamation.
- **Nature of Amalgamation:** Whether it is a merger, absorption, or any other form of amalgamation.
- **Consideration:** Details of the consideration for the amalgamation (e.g., shares, cash, or other assets).
- **Accounting Treatment:** A brief explanation of the accounting treatment adopted as per the scheme.
- **Impact on Financial Statements:** Any significant effects or adjustments on the financial statements due to the amalgamation.
- **Assets and Liabilities:** Information about the assets and liabilities transferred, if significant.

**3. **Disclosure Format:**
- **Notes to Accounts:** Present the summary in the notes to accounts in a clear and concise manner. Ensure that the information provided is adequate for users of the financial statements to understand the nature and effects of the amalgamation.
- **Referencing:** If necessary, provide references to where detailed information or full schemes can be accessed, such as specific documents filed with regulatory authorities or detailed board resolutions.

### **Example of Disclosure:**

Here’s an example of how you might disclose the particulars in the notes to accounts:

---

**Note X: Scheme of Amalgamation**

**Amalgamation Details:**
- **Date of Sanction:** The scheme of amalgamation was sanctioned by the Honorable High Court of [State] on [Date].
- **Companies Involved:** [Company A] (Transferor) and [Company B] (Transferee).
- **Nature of Amalgamation:** Merger of [Company A] into [Company B].
- **Consideration:** [Company B] issued [number] shares of [₹/share] each to the shareholders of [Company A] as consideration for the amalgamation.
- **Accounting Treatment:** The amalgamation has been accounted for as [specify the method, e.g., pooling of interests, purchase method] as per the scheme and applicable accounting standards.
- **Impact on Financial Statements:** The amalgamation has resulted in an increase in [specify if there are significant increases in assets, liabilities, or equity]. The total value of assets and liabilities transferred from [Company A] to [Company B] is [₹amount].

---

### **Summary:**

1. **Summarize Key Elements:** Provide a summary of the scheme’s key elements and significant terms rather than the entire scheme.
2. **Focus on Material Information:** Include details that impact the financial statements and provide clarity on the nature and effects of the amalgamation.
3. **Clarity and Conciseness:** Ensure the disclosure is clear, concise, and sufficient for users to understand the implications of the amalgamation.

By following these guidelines, you’ll ensure that the disclosure of the scheme of amalgamation meets the requirements of AS 14 and provides valuable information to users of the financial statements.

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