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Amalgamation doubt


(Guest)

If liquidation expenses of transferror is borne by tranferee company,then Is same shall be added in valuation of purchase consideration?. Please give me valuable suggestion in support of your answer.


 2 Replies

AKSHIT MALHOTRA (C.A Final Student) (1337 Points)
Replied 10 August 2012

NO MANISH LIQUIDATION EXPS R NT PART OF P.C.IF U REMEMBER THE DEFINATION OF P.C IT IS THE PAYMENT MADE TO SHAREHOLDERS OF TRANSFEROR COMPANY.

CA Gopal Somani (Associate Consultant at Infosys Ltd.)   (464 Points)
Replied 13 August 2012

No..According to AS-14 "Accounting for Amalgamation" only payments made to the SHAREHOLDERS of the transferror company are included in the Purchase consideration..Since payment of liquidation expenses are  not made to shareholders, hence it is not included in purachase consideration..


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