Accounting for amalgamation- merger method

As Per  AS-14 In case of Amalgamation in the nature of Merger -

Difference Between Purchase Consideration ( always in Shares) and Networth (Book Networth) is Capital Profit or Capital Loss.

Since, The Merger and Acquisation is non -recurring event so, it is a capital nature transactions thus profit or loss on such transaction is adjusted against Reservce (which is of capital Nature).

Second query of yours is not clear ? Kindly Eloborate

Nice explanation.

It implies that

1. In case purchase consideration < share capital of transferor company (i.e. capital profit), it is to be credited to Capital Reserve.

2. In case purchase consideration > share capital of transferor company (i.e. capital loss), it is to be debited to Capital Reserve. However, if capital reserve is insufficient, the loss could be adjusted against revenue reserves like general reserve, P&L A/c.

plz tell if it is right???

Yes You Are right.......
 

Accounting Perspective : You can adjust  Negative Capital Reserve with General reserve or Carried Forward Balance of P&L.

Reporting and Presentation Perspective : It shoudl be disclosed Seperately