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Amalgamation
If transferee co pays liquidation exp of transferor co than we do write entry in transferee books as goodwill a/c Dr
To bank
But in one problem I observed that later such goodwill had set offed with capital reserve , can any one explain me y they did so
Replies (7)
When you calculate excess or short paid for the worth of the company, definately it has to be adjusted with our own reserves ( purchasing company reserves ). Since in pooling of interest, you dont take over reserves of the company, question of adjusting with reserve of the selling company doesnt arise !
sorry the above reply is for the other question
Its ok sir ,Tnq once again its very worth full answer to me
It is not necessary to transfer goodwill to capital reserve....It is the same thing..either u set off this loss from capital reserve or add to goodwill a/c...doesnt make a difference...The setoff u are talking about is related to sch3 disclosure in financial statements...
U can urself read As 14 for better understanding...
Tnq fr reply
may be ... transferee paid Purchasing consideration lesser than the assests taken over from transferor company.... so capital reserve created on above was adjusted against Goodwill
Tnq fr reply
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