Amalgamation

Dear SAN,

Purchase consideration will be calculated as normal. The next step will be to eliminate the stake of the purchasing company so as to arrive the right amount of payment to be made to other shareholders.

Remember Business precedes accounting.

Accounting is mere translation of business language into figures

When you take business decisions you thing in terms of business. You think of the best deal. 

Abc Ltd. is selling co.

Xyz Ltd. is Purchasing co.

Purchase consideration is Rs.10 Lakh Payble in 10000 Shares @ Rs.100 each

If Abc ltd. Already have 2000 Shares then now new share issue 8000

Thanks

sir,cant it be a loss of vendor co.tat it get less pc value.the co should get 10000+2000shares na? how does the co know the same co whch he had share in past,will amalgamate his firm?can you please clarify my doubt.

it is not loss for any one

because purchasing co. purchase whole business or  balancesheet the share held by vendor co. is investment for him & Purchasing co. also purchase it now the purchasing co. is owner of its.

if the pc is 10000 shares then purchasing co. can issue 10000 shares & already held shares taken back by purchasing co.

so shortly it is 10000-2000 = 8000 Shares issue 

Thanks mohit  for Clarification.