Amalgamation - fin reporting - ca final

SIVASIVA (FCA, Future CA) (4935 Points)

04 October 2013  

dear friends,

Just want to share you and receive your thoughts on it

Purchase Co  acquiring Shares in Selling Co. What are the Phases in which Accounting should be done as per 'AS 14 - Accounting for Amalgamation'

Phase I - Calculation of Purchase Consideration

Phase II - Accounting in the Books of Selling Co.

Phase II - Accounting in the Books of Purchasing Co.



  Purchase Consideration based on Payments which P made to S.  or   based on Net Assets on S.  


PHASE II - code is (R-PC-T-S-D)

  1. Realisation of Assets & Liabiities

  2. Due entry and Receipt Entry for Purchase Consideration

  3. Transfer of Share Capital, Reserves and Realisation profit/loss

  4. Settlement to Shareholders 

  5.  Discharging all the Assets and Liabilities which are not taken over by Purchasing Co.


PHASE III -   code is (D-I-D-K-S)

  1. Due entry for Purchase Consideration

  2. Incorporation of Assets & Liabilities

  3.  Discharge of PC

  4. Knock off of Inter Company Ownings, Stock reserve unrealised, Realisation Exps

  5. Statutory Reserve for Amalgamation Adjustment. ( only for Purchase method)

note: any correction please comments for modification