statutory reserves

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krishna chaitanya

krishna chaitanya (Querist)
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08 August 2010 Respected Members

how to deal with statutory resreves in amalgamation of companies?

regards

chaitanya

srinath

srinath (Expert)
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08 August 2010 in amalgamation which is of merger in nature u need to incorporate all the assets and liabilities at book value and so it would be automatically incorporated

if is purchase method then the following entry may be passed

amalgamation adjustment a/c Dr.
to Statutory reserves a/c

amalgamation adjustment is to be shown under misc exp in b/s

CA.Pujah

CA.Pujah (Expert)
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09 August 2010 Irrespective of whether the amalgamation is in nature of merger or purchase, the nature of statutory reserves is to be maintained and carried forward to the new company.
The entries are as above

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